I an novice for f &o. Plz help me

[bunny]

Hey bunny ,

In his case, how much profit he made , 126.55-105 = 21.55 X 50 = 1077.5

explain me profits in options depends on what premium or even closing of nifty ?

i mean if he bought 5000 CE and @ expiry it closes 5300.

how profits r calculated.

Thanks

There are some formulas to calculate it. Plz google them.

 

[AW10]

Hey bunny ,

In his case, how much profit he made , 126.55-105 = 21.55 X 50 = 1077.5

explain me profits in options depends on what premium or even closing of nifty ?

i mean if he bought 5000 CE and @ expiry it closes 5300.

how profits r calculated.

Thanks

Sumit, profit in any kind of trading (be it stock, option or house) is given by simple formula that we read in primary school..

Profit = (Sell price - Buy price) * Qty

So the profit in above txn is 1077 Rs.

Now, if he holds 5000 CE and on expiry mkt is at 5300.. then sell price = settlement price.. which will be 5300-5000 = 300 Rs.
So the profit in that case will be (300-105) *50

There is no change in formula but only change is in sell price.

To get to the bottom of this doubt, try learning about the concepts of option pricing..instead of mugging up the forumula.

Hope this clarifies your doubt.
Happy Trading

 

[ranj_2k]

Profit calculated by Sumit is right if squared up before expiry.

If he waits till expiry then profit (excluding brokerage) will be calculated as under:-

(53005000105) x 50 = 9750

Since premium will be nil on expiry.

Thanks

 

[b_tirupati]

Hi ALL,
Could anyone tell me plz about "NIFTY INDEX OPTION IMPLIED VOLATILITY" in layman language and how to calculate it.
I am trading in nifty index option (call/put). I want to calculate volatility but dont know how. Lot of tools are available on net but these tools riddle me.

Thanks in advance
Balajee

 

[himadripkakoty]

thank you very much for the link