Day 1

TRADING MENTORSHIP
PROGRAM WITH
ASEEM SINGHAL
Bootcamp Outline
ALGO TRADING
Options Round 1 Options Round 2 Equtity Strategies
USING PYTHON
BEFORE WE START
- This is NOT a tip providing service. NO tips will be ever provided.
- This is NOT a software which generates any signals. This is a code learning course
- There are NO guarantees of any profits/returns even after completion of the course.
- You will NOT become Python experts after this course. This is a basic Python course.
- Sample coding will be shown in only Zerodha, Fyers and Finvasia.
- During the course, some backtest results will be shown for different strategies. This is purely for learning purposes.
There is no guarantee that similar results will be possible in the future.
- The course teaches you how you can create your own strategies. Hence, the results of each strategy may differ
depending on the inputs that you put in.
- Learning coding and algo takes considerable effort. You should be willing to put effort into learning.
- Each class is important and the concepts taught will be used in subsequent classes. If you miss classes, it is your
responsibility to view recordings.
- Options trading and algo trading are subject to market risks.
- Always be very careful when dealing with codes in which you can place orders in your account.
- You are responsible for any losses/profits that occur in your account in case you plan to take trades in your
account.
- TFU and Aseem Singhal do not take any responsibility of you running these codes on your account and the
corresponding profits and losses that might occur.
DAY 1 - Basics of options
What are options?
Options are tradable contracts that investors use to
speculate about whether an asset’s price will be higher
or lower at a certain date in the future, without any
requirement to actually buy the asset in question.
Example
For example, Nifty 50 options,
allow traders to speculate as to the future
direction of this benchmark stock index,
which is commonly understood as a stand-in
for the entire Indian stock market.
At first glance, options seem a little
counterintuitive, but they’re not as
complicated as they appear.
To understand options, you

just need to know a few key
terms:
1. Derivative
2. Call option and put 1. Derivative

option
3. Strike price and Options are what’s known as a

expiration date derivative, meaning that they
derive their value from another
4. Premium
asset. Take stock options, where
5. Intrinsic value and the price of a given stock dictates
extrinsic value
the value of the option contract.
6. In-the-money and
out-of-the-money
1. Derivative
2. Call option and put 2. Call option and put option

option
3. Strike price and A call option gives you the

expiration date opportunity to buy a security at a
4. Premium predetermined price by a specified
date while a put option allows you
5. Intrinsic value and to sell a security at a future date
extrinsic value
and price.
6. In-the-money and
out-of-the-money
1. Derivative
2. Call option and put 3. Strike price and expiration date

option
3. Strike price and That predetermined price

expiration date mentioned above is what’s known as
4. Premium
a strike price. Traders have until an
option contract’s expiration date to
5. Intrinsic value and exercise the option at its strike price.
extrinsic value
6. In-the-money and
out-of-the-money
1. Derivative
2. Call option and put 4. Premium

option
3. Strike price and The price to purchase an option is

expiration date called a premium, and it’s calculated
4. Premium
based on the underlying security’s
price and values.
5. Intrinsic value and
extrinsic value
6. In-the-money and
out-of-the-money
1. Derivative
5. Intrinsic value and extrinsic value
2. Call option and put
option
Intrinsic value is the difference between
3. Strike price and
an option contract’s strike price and
expiration date
current price of the underlying asset.
4. Premium Extrinsic value represents other factors
outside of those considered in intrinsic
5. Intrinsic value and value that affect the premium, like how
extrinsic value
long the option is good for.
6. In-the-money and
out-of-the-money
1. Derivative
2. Call option and put 6. In-the-money and out-of-the-

option money
3. Strike price and
expiration date Depending on the underlying security’s
price and the time remaining until
4. Premium expiration, an option is said to be in-
the-money (profitable) or out-of-the-
5. Intrinsic value and
extrinsic value money (unprofitable).
6. In-the-money and
out-of-the-money
CALL OPTION
VS.
PUT OPTION
Call Option

A call option gives the holder the right, but

not the obligation, to buy the underlying
security at the strike price on or before
expiration.
A call option will therefore become more

valuable as the underlying security rises in
price (calls have a positive delta).

Long Call Short Call

Put Option

Opposite to call options, a put gives the

holder the right, but not the obligation, to
instead sell the underlying stock at the strike
price on or before expiration.
A long put, therefore, is a short position in the

underlying security, since the put gains value
as the underlying's price falls (they have a
negative delta).

OPTION SELLING
VS.
OPTION BUYING
BUYER SELLER
Pays a premium Receives a premium

Receives a Right Has an obligation
Buying Selling
Option buyer is the one who is willing to Option seller is the one who receives
pay the premium in advance for having a premium as a fee for surrendering his
right to buy and sell(call and put) the right on asset till expiry.
asset on expiry.
I am exercising
my call options. No problem.
Give me stock Pay me the Strike
Price
Call Buyer Call seller

Buying Selling
Advantages Advantages
Premium is very less for the option Margin is high but no need to pay cash
buyer so margin requirement is collateral also works.
less. 2 factor works in favor of option seller
(For eg if 16000 CE sold if it goes down it
Loss is limited.
is profitable but if it stays there only than
Unlimited Profit opportunity. also it is profitable.
Theta Decay works in favor
Disadvantages Disadvantages
Premium has to be paid in Cash Margins are high.
Theta decay makes option Limited Profit.
premium lose money Unlimited Loss.
Call Buy Call sell
Buying stock gives Selling a naked or
you a long uncovered call
position. Buying a gives you a
call option gives potential short
you a potential position in the
long position in underlying stock.
the underlying
stock.
Put buy Put sell

Buying a put Selling a naked or
option gives you unmarried put
a potential short gives you a
position in the potential long
underlying stock.
position in the
underlying stock
ITM
(In the money)
ATM At the money)
OTM (Over the money)

In the Money
A call option is in-the-money if the 'strike price is less
than the current market price' of the underlying asset.
I.e. Spot- Strike > 0
A put option is in-the-money if the 'strike price is greater

than the current market price' of the underlying asset.
I.e. Spot- Strike < 0
PREMIUM
CALCULATION
Options premium = price that option buyer must pay
to the options seller (or writer) for an option
contract.

Options premium is derived from 2 values:

Options premium = Intrinsic Value + Time Value

Intrinsic Value
The Intrinsic value is the amount by which the strike price of an option is In-
the-money.
For call option, the Intrinsic value is the underlying stock price minus its call
strike price. For the put option, the Intrinsic value is the put strike price
minus the underlying stock price. Note that ATM and OTM options don't
have any Intrinsic value.
For Call Options: Intrinsic Value = Current Market Price - Strike Price
For put options: Intrinsic Value = Strike Price - Current Market Price
Note: If Intrinsic Value comes in -ve, they are considered as 0.

Time value
Also known as Extrinsic Value
The value of the remaining days until the options contract expires. The
Time value decreases to zero over time as the option moves closer to
expiration.
Higher time value (longer time to expiry) results in to higher premium.

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TRADING MENTORSHIP

To understand options, you

2. Call option and put 1. Derivative

3. Strike price and Options are what’s known as a

2. Call option and put 2. Call option and put option

3. Strike price and A call option gives you the

2. Call option and put 3. Strike price and expiration date

3. Strike price and That predetermined price

2. Call option and put 4. Premium

3. Strike price and The price to purchase an option is

2. Call option and put 6. In-the-money and out-of-the-

A call option gives the holder the right, but

A call option will therefore become more

Long Call Short Call

Opposite to call options, a put gives the

A long put, therefore, is a short position in the

Pays a premium Receives a premium

Call Buyer Call seller

Put buy Put sell

ATM At the money)

OTM (Over the money)

A put option is in-the-money if the 'strike price is greater

Options premium is derived from 2 values:

Note: If Intrinsic Value comes in -ve, they are considered as 0.

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