What is CE and PE in the share market | CE and PE mean in option trading
The stock market is the most difficult platform for beginners. If you know about its fundamentals and technical terms then you can understand better the stock market.
Today we discuss what are CE and PE in the stock market.
Options trading is an even more confusing concept for experienced traders. There are more technical terms used in options trading like CE, PE, lot size, strike price, and many more terms you have to know before investing in options trading.
There are many investing techniques in the stock market to increase your returns and minimize your loss. Like option trading is one of the investing methods also uses as CE and PE. Many investors are interested in options trading to make quick money, but as well as this trading method will have the same risk to wipe out your total money. So, before investing in options trading you can learn more about it.
What Is CE In Stock Market
CE means call European or Call option trade method. Investors had a contract to buy an asset within a certain period of time.
The asset may be a share, bond, or commodity. If the value of the asset raises buyer calls for gain. This happens usually utilized by investors to predict the price of particular stock, bond, or commodity.
How CE Option Works In Stock Market
For example, if you predict Nifty 50 is at INR 17,500 and you believe its value can gain in the next couple of weeks. So you decided to call option CE with a strike price of INR 18000 in the next two weeks. And pays a premium amount of INR 50 for this trading.
In the next couple of weeks, Nifty 50 raises INR 18500, and the call option buyer has the right to sell the shares INR 18500 with a profit of (18000-18500 -50) 450.
What Is PE In Stock Market?
PE means Put Option Or Put Europian. This trading method is the exact opposite of the CE trade method. Put option trade give a contract that gives the buyer to hold an asset but not the commitment, to sell at a particular price within a certain time period.
How PE Option Works In Stock Market
In this trading method, an investor believes the Nifty 50 will not perform well in the next couple of weeks, and its value will go down.
So the buyer decides to Put an option for Nifty 50 with a strike price of INR 17000 in the next 2 weeks. And he pays a premium of INR 50 for this trading.
If the Nifty 50 share value falls up to INR 16500 within a span of 2 weeks, the buyer has the right to sell the share INR 17000 and he can make a profit of (17000-16500-50) 450 with this trading method.
How To Do Option Trade Method?
The official website of NSE will provide the CE, and PE options for each company’s stock, also you can easily access it with your brokerage app. Every broker app will provide an options trade method.
Conclusion
These are the details about options trading and the terms called CE and PE with their explanation. Hope you can get some basics about options trading and its fundamentals. As a beginner make sure with proper investing your money, and any mistakes you make that totally wipe out your entire capital in the share market. So before investing deeply analyze and stick with core basics.
FAQ
What are CE and PE in the Stock Market?
CE means Call Option and PE means Put option. These terms are commonly used in options trading.
Is option trade better than buying shares?
The option trade method involves huge risk while comparing the stocks, but you can earn quick money in the options trade method.
How Do I trade CE and PE?
Investors most anticipate a price increase for the underlying asset to profit from call option
Also Read: What Is CMP In Share Market
Also Read: Fundamental Analysis Of Stocks
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