Options - Some basic questions

Hi Pros!

I have been trading stocks for past 5 yrs. Recently Options caught my eye. I have read the theory but confused about how it really works in the Indian stock market scenario.

1. Lets say Nifty 5800 Call is showing as 41.00. How much cash do I need in my account to buy it? Is it Rs 4100 for 1 lot?
2. Lets say Nifty 5800 Call price increased to 45.00 1 day later. Can I sell my call option and make profit of Rs 400 or am I bound to wait till expiry?
3. Does this work differently for individual stock options (I mean non-index based options)?
4. Can I use standard stock charts to make decisions for options? Is there any downfall of doing so?

I am sorry if my questions sound very basic but I need the answers to break the barrier.

Thanks
Prodigi

genuine queries .... we all had similar queries when we started out ... Find answers below

1. Lets say Nifty 5800 Call is showing as 41.00. How much cash do I need in my account to buy it? Is it Rs 4100 for 1 lot?
Ans: Nifty lot size is 50 ... So you need (50 * 41) = 2050 Rs to buy it

2. Lets say Nifty 5800 Call price increased to 45.00 1 day later. Can I sell my call option and make profit of Rs 400 or am I bound to wait till expiry?
Ans: You can sell anytime you want (Intra-day or anytime before expiry). If you sell at 45, you get (50 * 45) = 2250 Rs back. 200 Rupees gains

3. Does this work differently for individual stock options (I mean non-index based options)?
Ans: Works in the same way. Lot size varies for each stock and each index. Stock Options will be very risky as some of them will have very less volumes and liquidity (Best to stick to Nifty and Bank Nifty for options). Futures may work better for stocks, if you know what you are doing

4. Can I use standard stock charts to make decisions for options? Is there any downfall of doing so?
Ans: From my experience, betting one way in Options will not work consistently. Its better to get into strangle strategy or stick to intra-day for one way bets. Time is always against us in Options ... As we lose time, we lose our money in options ... So, yes, there is downfall

Start with little amounts, and gain experience ... I am, as we speak writing a book on Futures, Options and Commodity Trading ... It will definitely make you wiser if not profitable on such trading stuff ... The book should be available by end of this year

Thanks for responding and I am happy that most of my assumptions are correct. Please do post on the forum when your book is ready

If I cant use standard stock charts then what are alternatives? Any tools apart from NSE website where I can chart options?