Options Basics | CA Final SFM (New Syllabus) Classes & Video Lectures

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Options are such derivative financial instruments that do not bind the option holder into a firm commitment. Options in fact provide the right to the option holder to exercise or not to exercise such rights as options.
Option Holder: One who, holds the right to buy or sale
Option Writer: One who, provides the right
Example
X and Y enter into an agreement where X will have the right to purchase 1,000 equity shares in NJ Ltd. at a price of ` 32 per share on 01.01.2011.
In the above example, the contract between X and Y is an option contract where X is an Option Holder and Y is an Option Writer. The underlying asset in the contract is equity shares in NJ Ltd.
This derivative contract is known as “Call Option” because it provides a right to the option holder to purchase. The exercise price or the strike price is ` 32 per share. The maturity date of this option is 01.01.2011. On the date of maturity the option holder, i.e., X has a right and not an obligation to buy such equity shares. If X however, exercises his right to buy then Y will be under obligation to sell.
Therefore, the option holder is always at a benefit. For sake of such benefit the option holder has to pay option premium to the option writer. Such premium is payable irrespective of whether the option is exercised or not.
American Options V/s European Options
If an option can be exercised on any day up to the expiry date (in other words on or before the expiry date) then such option is known as “American Option”. Where an option can be exercised only at its maturity or expiry date, then such option is known as “European Option”.

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[@shivvtiwari1430]

100 likes and 0 dislikes. That shows how good your content is.

[@rhythmicpratik7852]

Never understood this concept in this much simple way...thanks alot for these videos sir.

[@vikasrajbhar7304]

किसी ने सच ही कहा है कि बिना गुरु ज्ञान नही होता जहा आप जैसे गुरु हो तो ऐसा बात ही क्या

[@siddhikabra1579]

Hands down the best explanation on this topic available. Thank you so so much for such a lucid explanation.

[@dezywankhede9810]

Hello sir,...I m from engg background but still after listening to ur lectures , I am able to understand... Aisa samjhta hai ki next time padhne ki zarurat nhi.. thank you sir from heart...
Best explanation...

[@NikhilJobanputra]

Thanks Dezy.
I will continue to render my best efforts.

[@astikapandey9207]

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[@yashsavlani4064]

Crystal clear explanation !!👌...thanks sir👍...please upload more such videos.

[@sweetu4717]

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[@mounikay8142]

sir some parts of your videos are in english and some are in hindi...pls kindly requesting you to upload vedios in english..not every student understand hindi but almost all the students understand english .. there are many teachers who teach in hindi on youtube but we could find someone very rare teaching in english...so please consider people like us sir 🙏

[@ravindramhegde]

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[@nerjisaly2411]

Thank you for explaining this and making us understand easily.

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World most best teacher

[@sushmithareddyvardhireddy2698]

Thank you very much sir!❤️❤️❤️

[@alappuzha9]

Sir you are superb... Even a financial illiterate can understand 🙏

[@NikhilJobanputra]

Thanks a ton

[@manikannan6765]

Sir first of all i wish you teachers day wishes .... ur way of Teaching marvelous and extraordinary....
But ur first derivatives videos is comfortable for all becz u taken in english language.... using english language is comfortable for all especially downsouth students sir pls consider my request

[@someshds855]

tq sir, please upload English lecture on this topic

[@shajadali8187]

You have best, simple, clear explanation as well as good english

[@divyatripathi7425]

It's an wonderful explaination, thank for uploading such videos....
But I m not able to find derivatives topic serial wise...

[@NikhilJobanputra]

Hi Divya,
Please refer the Playlist on Derivatives.

[@divyatripathi7425]

@@NikhilJobanputra okkk sir, thank you so much

[@harikapentapalli178]

Sir.. Is this applicable to old syllabus also.. Can I watch these videos if I am preparing for CA Final old syllabus??

[@NikhilJobanputra]

Yes Definitely...!!
Most of the topics in New syllabus are same as they were in the old one.

[@babus8587]

Not able to resist myself in giving a like to this video.. what a wonderful explanation, pronunciation.. Simply Superb... Kudos..

[@NikhilJobanputra]

Thanks a ton

[@sameekanp409]

Sir you are a good teacher.we get all topic in easy way.so have a request that please continue classes in English its better for all languagers to easy to follow

[@NikhilJobanputra]

All my classes are available in English as well. Please search on my channel properly. For your reference I am sharing the English version of this video:
ruclips.net/video/nGm67_mKxzk/видео.html

[@sameekanp409]

@@NikhilJobanputra thank you very much sir

[@harshilshah779]

Best Video on Options till date.
Sir, You've Nailed it🥀💥

[@sujathaprabhu8733]

Clearly explained sir. Thank you Sir.

[@aasthasharma2430]

Such a nice and easy explanantion. I wish I took classes from you. But either ways this video has helped now. Thank you so much sir

[@sonam_bajoria]

ThankYou sir..Perfectly explained for a naive student like me

[@dianajohns3779]

Sir wow what a superb class, i dont understand hindi properly, but your PPT IS SUPERB AND WRITING GIVEN BELOW THE VIDEO...helped me a lott to understand the class.
thank you so much and god bless you ........... 👌👌

[@NikhilJobanputra]

Dear Diana,
all of my videos are available in English as well.
You just have to search properly.
For this video the English version link is: ruclips.net/video/nGm67_mKxzk/видео.html

[@venutube5791]

Hi. Much better explained. But still have small doubt. Suppose the differnce of excercisable price and prevailing price is less than the premium, when what are option holders choices. For ex. If contract is for Rs,500, and on expiry if it becomes 492, where as he would have paid Rs10 premium, the instead of let go of 10, he will minimise loss by going for Rs8 loss. In any csse writer is paying only the difference of price( price x no of shares) Isn't it?

[@SAGAR05]

Thank you so much sir for making critical topic to vety simple. Sir I have one regarding who can become option writer.

[@jyoti8241]

Thank u sir

[@rollykiran5723]

Great Explanation, Thanks Sir. I just has a small doubt, in case of put option execution, MP < EP so why would a buyer buy from me at a higher price when the same share is available in the market at a lesser price ?

[@samanasim2409]

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NJ is an absolute legend.

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[@spicymadurai3569]

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[@NikhilJobanputra]

ruclips.net/video/nGm67_mKxzk/видео.html

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*️⃣*️⃣*️⃣*️⃣*️⃣ 5/5 for clear and simple logical explanation

[@shubhamjigale1320]

Great lecture Sir.. Can you please make video on how to price FX Option?

[@swatijain8320]

Superb sir ..Such a precise and clear explanation of this topic...👌👌✌✌

[@rathorerajshree8444]

Thankyu for simplifying the concepts sir

[@manash007]

Sir, Please upload capital budgeting topics for CA Final Old Syllabus

[@NikhilJobanputra]

Are you writing exam in May/Nov 2019...?

[@manash007]

@@NikhilJobanputra May, 19 under Old Syllabus.....not able to clear since last 4 yrs

[@NikhilJobanputra]

@@manash007 Please do not worry. I shall provide the best possible help.
Capital Budgeting Lectures shall be uploaded by January 2019

[@manash007]

@@NikhilJobanputra Thanks a lot Sir

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Sir please upload capital budgeting and leasing concepts

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sir, is there is any chapter you uploaded full concepts belongs to that chapter?

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[@nidasafdar2370]

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[@abhijeetpatil2051]

Sir thanks a lot for such a nice and simple explanation. Just one request..If possible please make a video on concept of options spread- Vertical spread, Horizontal spread and Diagonal spread. It would be a great help.☺️☺️☺️

[@compass5895]

Sir, what will be happened if sell is MP

[@hareramthakur5848]

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SIR PLEASE CONCEPT# 15&16

[@jyotikanchan9031]

Thanq sir

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Please where is the English version

[@ruchigoel2878]

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[@nithish4272]

31:00

[@vanyaprajapat7184]

Thanks a lots sir

[@venkatesha3425]

Thank you sir
Can you share the concept notes in pdf format

[@Rubinayousaff]

Concise explanation. 👍

[@vikramchavan4633]

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[@shajadali8187]

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[@Naghul3]

Sir
Your other videos were in English 😢

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Sir thanks a lot...

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thank you sir very helpfull

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Very Well Explained Sir .. :)

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Bhut hard sir Maza Aa gya

[@rakhikrishna2199]

Sir , please do this Vedio in English sir . Am loosing continuity from its first lesson..

[@NikhilJobanputra]

It is already there. Please search properly.

[@rakhikrishna2199]

@@NikhilJobanputra okay sir

[@natrajic]

Please upload in English if you don't mind.

[@govindarajulu364]

Why everyone is explaining in Hindi instead of English

[@NikhilJobanputra]

Dear,
This is India. Hindi is our National Language. That is why.
However, if you need my videos in English, they are available on request.

[@govindarajulu364]

@@NikhilJobanputra moreover in India all ppl don't know Hindi sir now English turns as world language that's y..... It's a request for u

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[@sonam_bajoria]

Which language the video is in then?

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Please make lectures in English sir

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Please we want your English too

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mr Nikil please use english then all the student of the world can be benefited

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Thank you sir 🙏

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Please make videos in English sir..

[@hiteshsahu3056]

Thanks sir