What Is a Call Option?Call Option Kya Hai?
Understand the call option: the buyer's right, the seller's obligation, and the payoff at expiry.Call option samjho: buyer ka right, seller ka obligation, aur expiry par payoff.
📖 LessonLesson
A call option (CE) gives the buyer the right, but not the obligation, to buy the underlying at a fixed price (the strike) on expiry. For NIFTY, which is cash-settled, this means the buyer receives the difference if NIFTY settles above the strike.
- The buyer pays a premium and benefits if NIFTY rises enough above the strike.
- The seller receives the premium and must pay the difference if NIFTY settles above the strike.
Call buyer's value at expiry = max(0, NIFTY settlement − strike). Profit = that value − premium paid.
Use the explorer below: move the expiry level and watch how the call buyer's profit and loss change.
Call option (CE) buyer ko expiry par underlying ko fixed price (strike) par kharidne ka right deta hai, obligation nahi. NIFTY cash-settled hai, isliye agar NIFTY strike se upar settle ho to buyer ko farq milta hai.
- Buyer premium deta hai aur fayda tab hai jab NIFTY strike se kaafi upar jaaye.
- Seller premium leta hai aur NIFTY strike se upar settle ho to farq chukata hai.
Expiry par call buyer ki value = max(0, NIFTY settlement − strike). Profit = value − diya hua premium.
Neeche explorer use karo: expiry level badlo aur call buyer ka profit/loss badalte dekho.
Hypothetical: Buy one NIFTY 25,000 CE at ₹120 (cost ₹120 × 65 = ₹7,800). At expiry NIFTY settles at 25,300 → value ₹300 → profit (300 − 120) × 65 = ₹11,700. If NIFTY settles at or below 25,000, the call expires worthless and the loss is the full ₹7,800.Hypothetical: Ek NIFTY 25,000 CE ₹120 me kharido (cost ₹120 × 65 = ₹7,800). Expiry par NIFTY 25,300 → value ₹300 → profit (300 − 120) × 65 = ₹11,700. NIFTY 25,000 ya neeche settle ho to call zero aur loss poora ₹7,800.
🛠 Practise itPractice karo
⚠️ Common mistakesCommon galtiyan
- Thinking a call profits as soon as NIFTY crosses the strike — it must also cover the premium.Ye sochna ki NIFTY strike cross karte hi call me profit — premium bhi cover hona chahiye.
- Forgetting that time decay works against the buyer.Bhoolna ki time decay buyer ke khilaaf kaam karta hai.
- Selling calls without understanding the risk of a sharp rally.Tez rally ka risk samjhe bina calls sell karna.
✅ Quick quizQuick quiz
Score 2 out of 3 or more and the lesson is marked complete automatically.3 me se 2 ya zyada score karo, lesson apne aap complete mark ho jayega.
📝 SummarySummary
- Call = right to buy at the strike.Call = strike par kharidne ka right.
- Buyer: limited loss (premium), profits above strike + premium.Buyer: loss limited (premium), profit strike + premium ke upar.
- Seller: limited gain (premium), risk if NIFTY rises sharply.Seller: gain limited (premium), NIFTY tez badhe to risk.
📚 Sources & market rules usedSources aur market rules
- NIFTY lot size: 65 — from the January 2026 contract series. NSE circular FAOP70616 (3 Oct 2025)
- NSE — equity derivatives
Last reviewed: 2 November 2026 · Version 1.0 · Prepared by the SmaartAlgos Academy team.Last reviewed: 2 November 2026 · Version 1.0 · SmaartAlgos Academy team dwara taiyaar.
Education only. SmaartAlgos is not a SEBI-registered investment adviser or research analyst. Nothing in this lesson is a recommendation to buy or sell any security. Options trading involves substantial risk of loss. Examples are hypothetical or simulated; market rules are shown with their effective dates — always confirm the latest official circulars.
Sirf education. SmaartAlgos SEBI-registered investment adviser ya research analyst nahi hai. Is lesson me kuch bhi kisi security ko buy ya sell karne ki salah nahi hai. Options trading me bada loss ho sakta hai. Examples hypothetical ya simulated hain; market rules effective date ke saath diye gaye hain — hamesha latest official circular confirm karo.