Part 2 Intraday Master Class

Rights of Option Buyers

Option buyers have certain rights defined by the exchange:

a) Right to Buy (Call Buyer)

The buyer can buy the asset at the strike price even if market price is higher.

b) Right to Sell (Put Buyer)

The buyer can sell at the strike price even if market price is lower.

c) No Obligation to Exercise

If the market is not favorable, traders can let the contract expire without exercising.

d) Limited Risk

The maximum loss for option buyers is the premium paid.

e) Unlimited Profit Potential

Call buyers can profit from rising markets

Put buyers can profit from falling markets

These rights are protected by the exchange, SEBI rules, and clearing corporations.