Strike, Premium & Expiry
Every option has three numbers: the STRIKE (the fixed price you locked in), the PREMIUM (the fee you pay for the option), and the EXPIRY (the deadline date). Strike = the agreed price. Premium = the cost. Expiry = the clock.
Three words appear on every option you'll ever see. Once they click, an option quote stops looking like code and starts reading like plain English.
Strike — the agreed price
The strike is the fixed price your option is built around. A NIFTY 24,000 call lets you 'buy' NIFTY at 24,000 no matter where it actually is. Pick a strike near the current price — called at-the-money (ATM) — or above it or below it depending on your view. (Two more you'll see: in-the-money, ITM, means the strike is already favourable to you; out-of-the-money, OTM, means it isn't yet.)
Premium — what you pay
The premium is the option's price — the fee for the right. It's quoted per unit, so the cash you pay is premium × lot size. A ₹120 premium on a 65-unit NIFTY lot costs ₹7,800. For a buyer, this premium is the entire maximum loss.
Expiry — the deadline
Every option dies on its expiry date. NIFTY has weekly and monthly expiries; after that the option settles and is gone. The closer expiry gets, the faster an option loses its time value — a critical idea you'll feel later as 'theta'. (An option's premium is really two parts: intrinsic value — the profit if you exercised right now — plus time value, the extra you pay for the time still left before expiry. Time value fades to zero by expiry.)
Go deeper — the technical detail
Reading a chain symbol: 'NIFTY 26JUN24 24000 CE' = a NIFTY call (CE = call european; PE = put) at the 24,000 strike expiring 26 Jun 2024. Indian index options are European-style (exercised only at expiry) and cash-settled — no actual delivery of the index.