hi everyone
,
i am a equity investor and having an account with sharekhan.i wanted to know about stock option trading i understand what is a call & put option.i understand that you take a stance of call option if you are bullish on underlying asset and a put if you are bearish.strike price is the the price in which you get a right to sell or buy the share.when i open my sharekhan account in trade now section there is a f&O section which asks for a specific f&O scrip in NSEF&O when on the order form there is expiry date,strike price,qty and a default block setted to limit.now can anyone clarify the following questions based on the illustration below:-
say, i place order of cairn option qty-1000 strike price of 300 expiry 28-4-2011
current market price of cairn around 350.
--in the strike price menu there are range of no from 120-450 or more can anyone explain how to choose the strike price and why will i get a lower strike price than the currrent market rate.
--say it 28-04 and the current price of the share is 375 how do i excersise the right and get the profit (means what i have to do.Do i have to sell a call option or the broker will automatically credit my account with the money)
--i know there is premium amount to be paid but how do i get to know the premium for the example above and also if price of the share goes below 300 will i have any loss apart from the premium paid.
sorry for the long tread and messy writing.
thank you for your time
, i am a equity investor and having an account with sharekhan.i wanted to know about stock option trading i understand what is a call & put option.i understand that you take a stance of call option if you are bullish on underlying asset and a put if you are bearish.strike price is the the price in which you get a right to sell or buy the share.when i open my sharekhan account in trade now section there is a f&O section which asks for a specific f&O scrip in NSEF&O when on the order form there is expiry date,strike price,qty and a default block setted to limit.now can anyone clarify the following questions based on the illustration below:-
say, i place order of cairn option qty-1000 strike price of 300 expiry 28-4-2011
current market price of cairn around 350.
--in the strike price menu there are range of no from 120-450 or more can anyone explain how to choose the strike price and why will i get a lower strike price than the currrent market rate.
--say it 28-04 and the current price of the share is 375 how do i excersise the right and get the profit (means what i have to do.Do i have to sell a call option or the broker will automatically credit my account with the money)
--i know there is premium amount to be paid but how do i get to know the premium for the example above and also if price of the share goes below 300 will i have any loss apart from the premium paid.
sorry for the long tread and messy writing.
thank you for your time
