The Life Cycle of an Option Trade

From execution to P&L realization. What happens behind the button click?

Steps

1. Analysis: You check the Chart, VWAP, and Option Chain. You decide Nifty is bullish.
2. Selection: You choose the 22,000 CE (ATM) Strike.
3. Entry: You place a LIMIT Order at ₹105. It gets filled.
4. Management:
   • You place a Stop Loss at ₹90 (risk management).
   • You watch the underlying spot chart.
5. The Move: Nifty jumps 50 points. Your option Delta is 0.5. Your option moves ~25 points to ₹130.
6. Exit: You sell your position at ₹130.
7. Settlement: The profit of ₹25 x 50 qty = ₹1,250 is credited to your broker account immediately (or by next morning).

Congratulations!

You have completed Module 1: The Foundation. You now understand what options are, how to choose strikes, and the mechanics of the trade.

Next, we dive into the "Engine Room" of options—the Greeks—to understand exactly why the price moves the way it does.