Options doubt in monthly closing

Dear senior member Doubt in option on monthly closing basic What happen when nifty future closed in this month (oct 2007) @5200. I sell l lot of nifty 5750 [email protected] and buy 1 lot of nifty 5600 Pe @63 please help me in the monthly closing basic. Please note I not covered any postion In Pe and Ce what is my profit in pe and ce

Hi Jayamsuccess;
U r indeed a success.congratulations on both ur positions being in profit.
When u sell an option ; ur profit is the premium received.In ur case rs.110/.;that is provide NIFTY doesn't go above 5750.Even Nifty goes down much below, u will not get further benifit. On the other hand ;If Nifty goes above that then u are bound to pay the the buyer the difference between 5750 & the figure at which Nifty closes on the F & O expiry. So ; in ur CE sellposition ; u keep a stop loss to protect the erosion of premium, in case Nifty reverses. U can buy back the CE any time u want; & close the position before the expiry. But in that case ur profit will be 110-the rate at which u buy the CE.
In case Nifty closes below 5750 , then ur full premium of 110/. is ur profit. No more , No less.

Coming to ur PUT OPTION U R IN VERY GOOD PROFITS.
Currently 5600 pe is @421.65/. & ur purchase price is 63/. Ur profit : 421.85-63.
U have 2 choices ;either u can bk. the profit by selling or u can let the profits run with a trailing stop loss to protect ur profits.
Looking at the mkt. conditions, it would be prudent to let the profits run with a trailing stop.

Cheers.

I think the profit should be :
(63)+(5600-5200=400-63=337)=400X50= Profit 20000/-

The above has an error , it should be :

(110)+(5600-5200=400-63=337)=437X50=21850
I had by mistake taken the CE sell at 66/-

Thanks Members thanks a lot

I think you should get following gain on closing of 5200 nifty expiry as by selling CE and buying PE means that in both the calls you have sold the nifty :
Sell CE 5750 @ 110 = (5750-110)-5200= 440 = 440 x 50 = 22,000
Buy PC 5600 @ 63 = (5600-63)-5200 = 337 = 337 x 50 = 16,850
CONGRATS.

Nifty CE 5750 sold @110 will give a profit of Rs.110X50 only and not as posted by you. Please reconfirm if I hv made an error.

Is there any different calculation for selling CE & PE from buying CE and PE? Please correct me if I am wrong.

When we sell a PE or a CE our profit is limited to the premium received, the diference between the spot price and strike price has no impact till the close is out of money

Please refer to the post by Penchant above

My calculations are based on the day of expiry and if nifty will close at 5200. That was the query of Jayamsuccess. Is the calculation right or wrong?