Doubt. Please Help

[deedeed]

Hi Guys,

Lets say I sell a Nifty 4500 Call Option at Rs.100.
And the nifty closes at 4590 on the last day.

I have not squared off my position.

So does this mean that I keep the full premium collected?

- Brijesh

 

[Smart_trade]

Hi Guys,

Lets say I sell a Nifty 4500 Call Option at Rs.100.
And the nifty closes at 4590 on the last day.

I have not squared off my position.

So does this mean that I keep the full premium collected?

- Brijesh

No ,you are selling a call which will be Rs 90 in the money (4590-4500) on expiry day and your a/c will be debited by Rs 90/- X the Qty sold.You have collected Rs 100 as premium less this debit of Rs 90 hence your profit will be Rs 10 less brokerages.

Best Wishes,

Smart_trade

 

[rinku4142]

how can he be still in profit when he sells a 4500call and nifty closes at 4590?

 

[Smart_trade]

how can he be still in profit when he sells a 4500call and nifty closes at 4590?

He has collected Rs 100 as premium my dear !!! 100premium collected -90 the debit on expiry = Rs 10 Less brokerage as profit.

Best Wishes,Trade well !!!

Smart_trade

 

[ARMHM]

hi..
i have some doubts about call writing..fir of all can anyone explain me the word "excercise",what is call excercising
sencondly if i sell 4800 call@10,so can i cover it any time..??? or i have to wait till expiry..???

Are you are talking about Nifty 4800 call which you want to write ? Index option can not be exercised before expiry but can be squared off anytime before expiry. Stock options can be exercised by the buyer anytime before expiry. There is a little difference between exercising and suaring off. Exercising means forcing the seller to pay while squaring off is done in the market if one gets a buyer for the option you want to square off.