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| Discuss Pls explain my following Call Options for tata Motors at the Derivatives within the Traderji.com - Discussion forum for Stocks Commodities & Forex; Hello friends, I am new to F&O. I would like to trace virtually my 2 ... |
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#1
1st November 2004, 05:55 PM
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Pls explain my following Call Options for tata Motors
Hello friends,
I am new to F&O. I would like to trace virtually my 2 call options just to make clear understanding of what happen if i make order for them. Right now , Tata motors closed at 415 Rs. at 1 Nov,2004. 25 Nov 2004 - CA - 400Rs is available at premium of 24 Rs. 25 Nov 2004 - PA - 400Rs is available at premium of 6 Rs. Suppose i buy 1 lot of 25Nov-CA@400 by paying 24Rs. & 1 lot of 25Nov-PA@400 by paying 6 Rs And Lets say on 25 Nov... Tata Motor is trading at 1) 390 2) 394 3) 400 4) 410 Then in all 4 cases, which of my order will get executed ? which options will expire without execution. Well, i understand for the same example if i buy 25Nov-CA@440 at 4.30 Rs today... 1) If on 25Nov, it is trading at 430 ------------- I know, this contract will expire without execution & i will loose 4.30 Rs / share, for 1 lot of 815 Shares. 2) If on 25Nov, it is trading at 450 ------------- I will make profit of 10-4.30 = 5.70 Rs per share for 1 lot (815 shares). Thanks in advance for your reply. Vijay. 
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#2
1st November 2004, 06:32 PM
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Re: Pls explain my following Call Options for tata Motors
Quote:
1)0.00 2)0.00 3)0.00 4)10.00 On expiry this will be the value of your PUTS: 1)10.00 2)6.00 3)0.00 4)0.00 Quote:
Quote:
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#3
2nd November 2004, 04:43 PM
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Re: Pls explain my following Call Options for tata Motors
Thank you TradingPics..
It is making my view more clear. One more query... 1) What happen if i will sell 1 lot of "25Nov-PA@420" at 10.25Rs. -------- Will this give me 10.25 Rs today on 2nd Nov ? & i think i would be bound to condition that "I must have to buy 825 shares of TATAMOTORS on 25 Nov. at 420Rs". Now.. lets say on 23 Nov.... I will buy 1 lot of "25Nov-PA@420" at XX.XX Rs.. then i have cleared my position... Is that true... ? --- Right now.... is "sharekhan" or "hdfcsec" or "icicidirect" allowing me to sell PA (put option) & have some fund in my account for 20 days without any extra margin limit ? This is giving me direction to learn F&O. Thank you, Vijay.
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#4
2nd November 2004, 04:51 PM
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Re: Pls explain my following Call Options for tata Motors
Quote:
If you sell a call or put you can close your position by buying back that call or put before expiry date. When you sell 1 lot of "25Nov-PA@420" at 10.25Rs you will receive the 10.25 right away and no you do not have to BUY the shares back.
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