Started trading options since last week. Got hold of some concepts like In the money, ATM and OTM. Also, understood to some extent intrinsic value.
I understand buying a option. But with a put I am struggling.
I bought 1 lot of option put of TATASTEEL OPT 30MAY 13 PE@300 rate: 2.90
I see that I am in loss. I am risking around 3000 here. But one question is, if stock price stays above 300, then do I need cover the trade by buying and will it result in more loss? Or at expiry should I allow to just expire?
Basically, What action should I action should I take that will keep my loss here to a minimum? Also, please explain the action motive so that I will understand buying puts better.
Thank you.
I understand buying a option. But with a put I am struggling.
I bought 1 lot of option put of TATASTEEL OPT 30MAY 13 PE@300 rate: 2.90
I see that I am in loss. I am risking around 3000 here. But one question is, if stock price stays above 300, then do I need cover the trade by buying and will it result in more loss? Or at expiry should I allow to just expire?
Basically, What action should I action should I take that will keep my loss here to a minimum? Also, please explain the action motive so that I will understand buying puts better.
Thank you.