what is ce pe

Discussion in 'Options' started by labdhi, Jul 18, 2012.

  1. labdhi

    labdhi Active Member

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    seniours'

    i am new to options
    don't know abc of it.

    i want to know that if nifty is trading on 5250 than what is 5200 ce and 5300 significies

    also what is pe means and what it significay if nifty is at 5250 than what is 5200pe and 5300 pe.

    waiting for suggestions in indian way as i saw danny sir language is very dangerous for a common indian man who doen't know english more.

    also sir in simple words how to play options as if in case of hedging how to use that.

    looking forward for seniours help

    i read in a thread that sg sir suggest some body to buy 2 nifty august contract and buy 1:2 of 30000 5200 ce and 5300 ce
    what it means

    thanks:clap::clap:
     
  2. Sunny1

    Sunny1 Well-Known Member

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    Basic info is available all over the internet Google helps.

    CE= call European
    PE = put European

    Basically its contract.
    IF you buy 5200 nifty CE means you bought contract to buy nifty at 5200 at expiry. In India options are cash settled . so at expiry if nifty is 5300 then 100 is your profit ( - premium i.e. price of contract).
     
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  3. labdhi

    labdhi Active Member

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    ok this means if i buy 5200 ce and price at expiry is5100 than i get 100 rs loss
    and if i buy 5300 ce and price is 5280 at expiry than i got 20 rs loss
    thanks sunny ji for so simply explain
     
  4. labdhi

    labdhi Active Member

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    currently 5200ce is at 50 what it's mean
    and 5300ce is at 14 what it's mean
     
  5. labdhi

    labdhi Active Member

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    1 se nifty me 50 rs ka farak padta hay
    is ce may kitna farak padta hay
     
  6. Sunny1

    Sunny1 Well-Known Member

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    I will correct you here. when buy option contract your maximum loss become fixed. that is the premium you paid.

    like above : 5200 ce at 50 mean 5200 ce contract is available for 50 rs...( nifty contract is 50 so ...50x50=2500 rs.) this 50 rs. called premium. same with 5300 ce

    so if you buy 5200 ce and at expiry nifty is at 5100 ...you dont incur 100 loss..but the premium you paid example 5200 ce at 50..you incur max loss of 50.
     
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  7. labdhi

    labdhi Active Member

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    so cool sir
    kya soda expiry kay pahlay bhi cut kar saktay hay kya
    also if it is now 50 and i buy it than after 3 days it become 70 than is 20*50=1000 is my profit sir can i cut at that time sir.

    r u frm hyderabad sir
     
  8. Sunny1

    Sunny1 Well-Known Member

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    you cannot cut but you sell your contract in the same way you bought it. so yes you will have profit of 1000 on that
    nobody waits till expiry even if its in profit...becuae once contract is exercised ..the govt will levy STT..which is huge ..so people sell it on expiry day if its in profit.

    ( and remember PE is contract to sell the underlying )

    I am from bangalore
     
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