Contract Basics
Understand what an option contract contains before reading a chain, premium or payoff.
Guided path
Step 1 of 8 - Contract basics
This step answers: What does one option contract contain?
Before you start: None. This is the starting point.
LEARN
Read one option contract
This NIFTY contract's premium is ₹120. That is not the strike or the index level.
Underlying referenceNIFTY ₹23,400.00This is a reference level. Owning a CALL does not mean owning the index.
Option and strikeCALL ₹23,400.00The strike is a stated contract level, not the premium paid.
Expiry15 Sep 2026The day this contract ends.
Quoted premium₹120.00The total amount is calculated separately from selected quantity.
EXPLORE
Change the example
The 50 here is just a quantity to work with, not the official NIFTY lot size. Check the actual lot size and rules on a reference page. Your changes stay only in this browser session.
Total premium₹6,000.00Premium × quantity
Reference underlying notional₹11,70,000.00Underlying reference × quantity. It is not a payment to buy the index.
Contract meaningCALLA CALL is linked to a right to buy at the stated strike
When you pay the premium₹6,000.00For one option, the premium paid is the most you can lose before charges.
When you receive the premium₹6,000.00The premium you receive is not the most you can lose. Your loss depends on the strike and where the index ends at expiry.
CHECK
Keep premium, strike and notional separate
With a ₹120 premium and a quantity of 50, what is the total premium?
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Understand the idea
Read the short lesson behind this tool.