Thanks all. Okay so far figured out: -
1.When writing a call or a put the premium one receives is No of shares of the lot x price paid at that point. If sold Ambuja cement call at 6 rupees then its 2000 (lot size)x 6 = 12,000.
2.Profit and loss is difference in buy sell prices x no of shares in the lot. However at expiry - its the difference between the stock price and the strike price, plus or minus.
3. Premium credited when option is sold immediately.
Please correct me if I'm wrong still - esp point number two. Its taken me one month to figure this out.
Cheers