Questions,
answered plainly.

F&O stands for Futures and Options. Both are derivatives: contracts whose value comes from something else, called the underlying. On the NSE the underlying can be an index such as NIFTY 50 or an individual stock.

A future is an obligation to buy or sell the underlying at a set price on a set date. An option is a right, not an obligation. F&O lets traders hedge, take a view on price, or earn premium, and every one of those uses carries risk.

A financial contract whose price depends on an underlying asset. When NIFTY moves, the price of NIFTY futures and options moves with it. You trade the contract, not the shares in the index.

An agreement to buy or sell the underlying at a price fixed today, for settlement on the expiry date. Both sides are bound by it. Profit and loss are settled every day (mark to market), and the exchange asks for margin to cover possible losses.

A contract that gives the buyer the right, but not the obligation, to buy or sell the underlying at a fixed price (the strike) on or before expiry. The buyer pays a premium to the seller for this right.

The buyer can lose at most the premium paid. The seller keeps the premium but takes on the obligation, so the seller's possible loss can be much larger than the premium received.

A call (CE) gains value when the underlying rises above the strike. A put (PE) gains value when the underlying falls below the strike. Buyers of calls expect a rise; buyers of puts expect a fall or want protection against one.

The fixed price written into an option contract. NIFTY options are listed at many strikes, spaced at regular intervals, around the current index level.

The price of the option, quoted per unit of the underlying. You pay it when you buy and receive it when you sell. The premium is made of two parts: intrinsic value and time value.

Intrinsic value is what the option would be worth if it expired now: for a call, how far the index is above the strike; for a put, how far it is below. Time value is everything else in the premium. It reflects the chance of a further move before expiry, and it shrinks to zero by expiry.

In the money (ITM): the option has intrinsic value. At the money (ATM): the strike is at or near the current index level. Out of the money (OTM): the option has no intrinsic value, only time value. A NIFTY call with a strike above the index is OTM; so is a put with a strike below it.

Expiry is the last day the contract exists. NIFTY has weekly and monthly expiries. The expiry weekday is set by the exchange and has changed over the years, so check the NSE calendar for current dates.

NIFTY index options are European style (exercised only at expiry) and cash settled: no shares change hands; the difference is paid in cash.

Options trade in fixed lots, not single units. One NIFTY lot is a set number of units decided by the exchange, which revises it from time to time. Profit and loss per lot is the premium change multiplied by the lot size.

Money the broker and exchange block in your account to cover possible losses. Option buyers pay the full premium and need no further margin. Option sellers must post margin, which can be large for an unhedged position. A hedged position, such as an iron condor, usually needs much less margin than selling options on their own.

A buyer pays a small, known amount and needs the market to move in their favour, soon enough, to profit. Time works against the buyer.

A seller receives the premium up front and profits if the option loses value, for example as time passes and the market stays away from the strike. Time works for the seller, but a large move can cause losses many times the premium received unless the position is hedged.

Measures of how an option's price reacts to change:

• Delta: change in premium for a 1-point move in the underlying.
• Gamma: how fast delta itself changes. It is highest for ATM options close to expiry.
• Theta: premium lost per day as time passes.
• Vega: change in premium for a 1-point change in implied volatility.

The daily loss of an option's time value. All else equal, an option is worth a little less each day, and the decay usually speeds up in the last days before expiry. Option sellers aim to earn this decay; option buyers pay it.

The size of move the market is pricing into an option. Higher implied volatility means higher premiums, both calls and puts. It tends to rise when markets are nervous and fall when they are calm.

An index published by NSE that measures the volatility the market expects in NIFTY over the next 30 days, worked out from NIFTY option prices. A higher VIX means the market expects bigger swings. Strategies that sell options often check VIX before entering a trade.

A strategy that holds positions overnight, often for several days up to expiry, rather than opening and closing within the same day (intraday). Positional option-selling strategies aim to earn time decay over that period.

Holding overnight brings gap risk: the market can open well away from the previous close because of news while the market was shut, and stop-losses cannot act until trading resumes.

A position made of two or more options on the same underlying, some bought and some sold. Spreads cap the possible loss (and usually the possible profit) compared with a single option. An iron condor and an iron butterfly are each made of two spreads.

Selling one option and buying a further-OTM option of the same type and expiry. You receive more premium than you pay, so the position opens with a net credit. The bought option limits the loss if the market moves through the sold strike.

A four-leg, defined-risk strategy built from two credit spreads:

• Sell an OTM put and buy a further-OTM put (a put credit spread below the market).
• Sell an OTM call and buy a further-OTM call (a call credit spread above the market).

All four legs share one expiry. The sold strikes mark a range around the current index level; the bought options, called the wings, cap the loss if the index breaks out of the range.

It opens with a net credit: the premium from the two sold options is larger than the cost of the two wings. If NIFTY stays between the sold strikes, the options lose time value day by day and all four can expire worthless, so the trader keeps the credit. The trade can also be closed early, for less than the credit received, to lock in part of the profit.

In short, an iron condor is paid for the index staying inside a range and for time passing. It does not need the market to go up or down.

When NIFTY moves sharply towards or past one of the sold strikes. The sold option on that side gains value fast, and the loss grows until the index reaches the wing on that side, where it stops growing. A sudden rise in implied volatility can also show a loss before expiry, even if the index has not moved much.

Illustrative numbers only, not ZTEN's settings. NIFTY is at 25,000. Sell the 24,000 put and the 26,000 call; buy the 23,800 put and the 26,200 call. Net credit received: 40 points.

• Maximum profit = the net credit, 40 points, if NIFTY expires between 24,000 and 26,000.
• Maximum loss = wing width minus credit = 200 − 40 = 160 points, if NIFTY expires below 23,800 or above 26,200.
• Breakevens = sold strikes ± credit: 23,960 and 26,040.

Multiply points by the lot size to get rupees per lot, then subtract charges. As the example shows, the possible loss is usually several times the possible profit, so how often the trade wins matters a great deal.

An iron butterfly (iron fly) sells a call and a put at the same strike, usually ATM, and buys an OTM call and an OTM put as wings. It is an iron condor whose range has shrunk to a single strike.

• An iron butterfly collects a larger credit because ATM options carry the most time value, but its profit zone is narrow. The full credit is kept only if NIFTY expires exactly at the sold strike, and some profit remains while it stays between the breakevens.
• An iron condor collects less, but profits across a wider range.

Both have defined risk and both earn time decay. A butterfly is more sensitive to small moves; a condor gives the market more room.

A short straddle sells a call and a put at the same strike; a short strangle sells them at different OTM strikes. Both collect premium, but neither has a cap on loss. Adding wings turns a straddle into an iron butterfly and a strangle into an iron condor. The wings cost part of the premium, but they put a limit on the worst case and reduce the margin needed.

A rule to close a position when the loss reaches a set level, so a bad trade cannot grow further. With options, a stop is often set on the premium of the sold legs or on the index level. A stop can trigger on a move that later reverses, and in a gap it can fill worse than planned.

Changing an open position as the market moves, for example closing a threatened short leg and selling a new one further away. Adjustments can reduce risk on one side, but they add charges and can turn a small loss into a larger one if the market reverses. Any adjustment works best as a written rule decided in advance.

NIFTY options are cash settled at expiry. Options that expire OTM become worthless. Any that finish ITM are settled in cash at their intrinsic value, and the matching wing caps the net loss. Many traders close positions before the final minutes to avoid sharp moves at the close.

No strategy is safe. Selling options tends to win small amounts often and lose larger amounts less often. A few bad weeks can erase many good ones. Defined-risk structures such as iron condors cap each trade's loss, but they do not remove it.

SEBI studies published in 2023 and 2024 found that about nine out of ten individual traders in equity F&O made net losses. Trade only with money you can afford to lose.

Each order carries brokerage, Securities Transaction Tax (STT), exchange transaction charges, a SEBI turnover fee, stamp duty and GST. A four-leg trade pays these on every leg, at entry and at exit, so charges can take a meaningful share of a small credit. ZSIM Lab includes charges in its replays.

The gap between the price you expected and the price you got. It comes from the bid-ask spread and from prices moving while an order fills. Far-OTM options and fast markets usually see more slippage.

The chance that the market opens far from the previous close because of news overnight or over a weekend. Positional strategies carry it every night they hold a position. Wings limit the worst case of an iron condor; a stop-loss alone does not.

No. A backtest shows how fixed rules would have behaved on past data. Markets change, and real fills, slippage and gaps differ from history. Treat any simulation as a way to understand a strategy's behaviour, not as a forecast.

ZTEN is strategy engineering for systematic options trading. It turns NIFTY options strategies into written rules, tests them on historical data, and runs them on schedule, the same way every day.

Buying a call or a put needs NIFTY to move far enough, in the right direction, before time decay eats the premium. Most retail F&O trading works this way, often intraday and timed on indicators, and SEBI's studies found that about nine in ten individual F&O traders made net losses.

Professional option desks more often run positional, hedged structures. An iron condor is paid for NIFTY staying within a range and for time passing, and its wings cap the loss on each trade. That suits written rules and a fixed schedule, which is what ZTEN is built to run. It is not risk-free: it tends to win small amounts often and can lose larger amounts.

Running an iron condor well takes three things: knowledge (strikes, wings, credit, volatility), testing on history, and the discipline to follow the same rules every day. These have mostly lived inside trading desks. ZTEN makes all three available to everyone, free: learn the strategy on this page, replay it on NIFTY history in ZSIM Lab, and set your own rules in MyZTEN, where the engine runs them on schedule and you confirm every order on Zerodha. New accounts start on paper trading.

The app where you set up and run your own rules-based iron condor. You choose the parameters, and Command Center shows capital in use, open positions, payoff at expiry and realised P&L. Free accounts run paper trading. MyZTEN never places an order by itself: in live trading, each trade opens as a basket on Zerodha's page and you confirm it there. Open MyZTEN.

A historical replay tool inside MyZTEN. It steps through 5-minute NIFTY candles and shows how a strategy's P&L, charges, peak profit and drawdown would have moved, before any capital is at risk. Open ZSIM Lab.

A public view of ZTEN's strategies at work. Open ZTEN Shadow.

Trading with simulated money. The rules run on market prices and every trade is recorded, but no real orders reach the exchange, so no capital is at risk. It is a way to watch a strategy behave before deciding anything with real money.

Yes. ZSIM Lab gives you 3 free runs a day without an account, and unlimited runs with a free account. MyZTEN and ZTEN Shadow are free for all registered users. There is no card and no plan. Register for free.

No. ZTEN does not provide investment advice, research recommendations or tips. It gives you tools to write, test and run your own rules. Every decision about whether and how to trade is yours. Please consult a qualified financial adviser before making investment decisions.

15% annualised XIRR is an internal benchmark ZTEN measures its own work against. It is not a forecast, a promise or an expected return. Results can be lower, and losses are possible.

Zerodha. Zerodha is a third-party broker and is not part of ZTEN. Any issue with orders, fills, funds, margins or your broker account has to be taken up with Zerodha directly. See Zerodha and your account for how MyZTEN connects to it.

Write to hello@zten.in. Every message is read.

No. ZSIM Lab and paper trading in MyZTEN work without one. You need a Zerodha account only to trade live.

Follow the Connect Zerodha guide. It has every click in order, with one version for a computer and one for a phone, and fixes for the common problems, such as the App code or a wrong redirect URL. You only need it to trade live.

No. Paper trading uses ZTEN's market prices and never touches your broker account. You can still connect Zerodha and log in: it checks that your connection works, so it is ready if you choose to trade live later. MyZTEN sends daily login reminders only to accounts trading live.

The key and secret belong to your own Kite Connect app, which you create on Zerodha's developer site. MyZTEN stores the secret and each day's access token encrypted. They are never shown again, never sent back to your browser and never written to logs; the key is only ever shown masked.

They let MyZTEN read your account and open baskets for you to confirm. They cannot move money or place an order on their own. You can cut access at any time: disconnect in MyZTEN, or regenerate the secret on the developer site, which makes the old one useless.

No. You type them on Zerodha's own login page. Zerodha then gives MyZTEN an access token for that day only. Your password and 2FA code never reach MyZTEN.

No. Kite Connect has no way to withdraw funds or transfer money out of your account. MyZTEN never places an order through the API: each trade opens as a basket on Zerodha's own page, and nothing is placed until you press the button there.

Your client ID and name, available funds and margin, open positions and orders. MyZTEN uses them to size trades from your real capital and to check that its legs match what is in your account.

SEBI rules require a fresh login each trading day for access through a broker API, and Zerodha's access token expires at 6:00 am the next morning. When you trade live, MyZTEN reminds you at 09:30 and before the trade rounds if today's login is missing.

No. Zerodha gives every client a free Personal app, and that is all MyZTEN needs. No paid Kite Connect plan or data subscription is required: market prices come from ZTEN, and your app is used only to read your account and open baskets.

In MyZTEN, open Profile and choose Disconnect. It ends today's Zerodha login at Kite and deletes your stored key, secret and access token. To remove access completely, also delete the app, or regenerate its secret, on developers.kite.trade.