1. Deferred delivery contracts.
2. Give the buyer a right but not the obligation.
3. Obligation for the writer / seller but not the righter.
4. A specified underlying at a set price to buy or sell on or before a specified date.

1. Call Option : Option to buy (+).
2. Put Option : Option to sell (-).
3. American Option : Can be excercised any time on or before the expiration date.
4. European Option : Can be excercised only on the expiration date.

1. Strike Price or exercise price.
2. Expiration date.
3. Exercise date.
4. Option Permium : Intrinsic value, Time value
   (i) in the money, (ii) at the money, (iii) out of the money.

1. Intrinsic Value : Difference between excercise price and spot price.
2. Cannot be negative for a call option (+) or put option (+).
3. Time value : Amount buyers are willing to pay for the possibility that, at some time prior to expiration, the option may become profitable.
4. Option premium :
   (i) In the money : Option with intrinsic value,
   (ii) At-the-money : Excercise Price - Market price.
   (iii) Out of the money : No intrinsic value - some time value possible.

1. Trader's right : Buy underlying at strike price.
2. Trader's obligations : Nil.
3. Premium paid or received : Paid.
4. Margin requirement : Nil.
5. Risk profile : Limited, to the extent of the premium paid.
6. Profit potential : Unlimited, if the price go up.
7. Breakeven Point : Strike price + Premium

1. Trader's rights : Nil.
2. Trader's Obligations : Sell underlying at strike price.
3. Premium paid or received : Received
4. Margin requirements : Yes.
5. Risk Profile : Unlimited, if prices go up.
6. Profit potential : Limited, to the extent of the premium received.
7. Breakeven point : Strike Price + Premium.

1. Trader's right : Sell underlying at strike price.
2. Trader's obligations : Nil.
3. Premium paid or received : Paid.
4. Margin requirement : Nil.
5. Risk profile : Limited*, to the extent of the premium paid.
6. Profit potential : Unlimited, if the price go down.
7. Breakeven Point : Strike price - Premium
8. Practically, Put option buyer's profit is limited as the price of the asset can not go below zero.

1. Trader's rights : Nil
2. Trader's Obligations : Buy underlying at strike price.
3. Premium paid or received : Received
4. Margin requirements : Yes
5. Risk Profile : Unlimited, if prices go down.
6. Profit potential : Limited, to the extent of the premium received.
7. Breakeven point : Strike Price - Premium.
8. Practically, Put option seller's risk is limited as the price of the asset can not go below zero.

Sensex Reaches from 2594 to 12671 in 55 Months.21 sep 2001 to 11 May 2006.

• Sensex Crashed from 12671 t0 8799 in 24 working days(A Wave)

• Correction will be of 34 Months & 38.2% Or 50% Or 61.8% of entire rise.: Elliot Wave Theory.
• Sensex expected Target 7656,6118,6069.
• Conclusion: Investments in Stock Market are not advisable till feb 2009,Thereafter sensex will reach to 17016 in 2014 or 2022. (1 June 2006)
• Current Corrective Move Expectaion of Sensex : 12148(B Wave)
(24 July 2006)