Options
DerivativesA contract giving the right, but not the obligation, to buy (call) or sell (put) at a set price.
In plain terms
Buyers risk only the premium. Sellers take limited gain for potentially very large loss.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
Showing 7 terms
ESOP
Fundamental analysisEmployee stock options granting the right to buy shares at a set price.
In plain terms
Rewards upside without punishing downside. Restricted shares align better than options do.
India VIX
Market basicsAn index of expected 30-day NIFTY volatility, derived from options prices.
In plain terms
The fear gauge. Normally in the low teens; it tripled during the March 2020 crash.
Max pain
DerivativesThe strike at which the largest rupee value of options would expire worthless, causing the greatest aggregate loss to option buyers.
In plain terms
There is a partial mechanism — writers hedging their exposure do exert some pull near expiry — but it is weak, easily swamped by news, and it recalculates as open interest shifts.
Option chain
DerivativesThe strike-by-strike table of open interest, change in open interest, volume and implied volatility for an underlying's options, published live and free by the NSE.
In plain terms
The strike with the largest call open interest often acts as resistance and the largest put strike as support, because writers hedging those positions generate real buying and selling. One source of confluence, not a forecast.
Implied volatility
DerivativesAlso called: IV
The volatility implied by an option’s price — the market’s expectation of future movement.
In plain terms
It rises before known events and collapses afterwards, which is why buying options into results often disappoints.
Special mention account
Regulation & taxAlso called: SMA classification, SMA-1, SMA-2
A loan account showing early signs of stress, graded by how long an amount has stood overdue — 1 to 30 days, 31 to 60 days and 61 to 90 days.
In plain terms
The lender's early-warning ladder before an account turns non-performing. Nobody tells the borrower they are on it, and it is the window in which the widest range of options still exists.