Newbie Question about Contract Price

B

barman

New Member
#1
#1
Hi,

I am trying to understand the various terminology related to Derivative Trading.
I have the following query:

For State Bank of India PE with Strike Price of 1900 is available at 122.00 (LTP) with Expiry Date of 31st May, 2011.The Lot Size is 125.

I understand that if I buy this contract I would be able to sell the 125 shares at Rs. 1900. My query is:

1. Will I be able to sell the shares only on 31st May or I can do that on any day before 31st.

2. What is the amount required to buy this contract. I believe it is 122*125 (LTP * Lot Size). Just confirming.

Waiting for you replies,

Thanks,
Barman.
 
SavantGarde

SavantGarde

Well-Known Member
#2
#2
barman said:
Hi,

I am trying to understand the various terminology related to Derivative Trading.
I have the following query:

For State Bank of India PE with Strike Price of 1900 is available at 122.00 (LTP) with Expiry Date of 31st May, 2011.The Lot Size is 125.

I understand that if I buy this contract I would be able to sell the 125 shares at Rs. 1900. My query is:

1. Will I be able to sell the shares only on 31st May or I can do that on any day before 31st.

2. What is the amount required to buy this contract. I believe it is 122*125 (LTP * Lot Size). Just confirming.

Waiting for you replies,

Thanks,
Barman.
Click to expand...
Exercising of Options is on Expiry day... since they are European Type Contracts...!!!

SG
 
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