Part 1 Candlestick Pattern

Practical Examples
Example 1: Bullish Trade

Buy 1 call of Stock A at ₹100 strike, premium ₹5.

Stock rises to ₹120.

Profit = (120 – 100) – 5 = ₹15 per share.

Example 2: Bearish Trade

Buy 1 put of Stock B at ₹150 strike, premium ₹8.

Stock falls to ₹130.

Profit = (150 – 130) – 8 = ₹12 per share.

Example 3: Covered Call

Own Stock C at ₹200.

Sell call at ₹220, premium ₹5.

Stock rises to ₹230.

Profit = (220 – 200) + 5 = ₹25 (missed extra ₹10).

Protection against small drops due to premium received.

Advantages of Options

Limited risk for buyers

Leverage potential

Flexibility in strategy

Hedging capabilities

Profit from multiple market directions