Options Doubt

Hi to all , those who engaged in options trading please clarify my doubt ,
suppose let assume yesterday i sold 7900 ce at 465 (closing price) , say Rs. 75k for margin and getting premium near 37k , now 7900+ 465 = till 8365 is safe in NF, if mkt going say 100 pts higher then have to pay mtm Rs.7.5k , so my margin is now 82.5k ,margin (75+7.5) but still i have profit in premium (so till margin cost to initial 75k + 37k = 112k is no loss in this trade ? if crossing this breakeven , exit trade without loss , only drawback is dumping money as margin and mtm ? i think something is wrong in my guessing , if like this all will do without loss tension na? ! what is wrong in my guess?Experts please spend sometime to guide me , THANKS a lot in advance .:thumb::clapping::clap:

explaining little bit ,
margin 75k or day to day mtm increased will be returned when closing position , so thats not a problem , now profit is 37k in hand , till the margin+ mtm amount nullifies this gain in hand as premium 37 k no loss , this is right ? 7900+465 = 8365 theoriticlly is right , but i have got 37k in my hand this spot im confusing , so erasing more than this amount then only will be loss ? or where im getting confuse ?

Don't get confused with Margin and Premium Credit...that is NSE rule for accounting purpose....

Your risk starts above 8365.....

If suppose...tomorrow is settlement...

Assume Nifty is closed at 8375.....then your loss will be 10 points...

Then in your premium amount will be debited....margin money will also be reversed....net effect in your a/c -750 (loss)...

Thanks Rish sir ,but still im not clear , !! . does at expiry , below 8365 then only i will not be debited the same premium credited now , if at expiry 8375 then i will debited all the same premium and also -750 for 10 pts ,?

what if the same situations if at today or tomorrow ie after 2 ,3 days with 10 pts high or low after selling pe ?

please dont mind for asking again and again , still i am not understand properly.

while studying , premium , margin , time decay , intrinsic value looks like understand , but when come to try to understand in imagining in real trade looks like confusing !!

Entire premium 465 will be yours...if market close at 7900 on settlement day....or else....difference amount is yours....not entire amount...

Again thanks Rish sir , now slighlty looks realising, if at expiry 7900 entire 465 will be if 8100 means 265 will be mine , ok ,
(1 ) but what the time decay plays here , if say tomorrow touches 7900 ( just for asking , no chance at all ) then all can square with whole profit?

(2 ) what if til expiry consolidates here and there beteen 50-100 pts and finally closes at same 8365 , nil gain for me ?

(3) what are the various probabilities of time decay in this trade ,


PLEASE , these are final questions , dont disturb you more and THANKS a lot for your replies sir , :clapping::clapping::clapping:

I hope you are clear...

Rish sir , THANK you very much sir , :clap::clap::clap:

shivasrinivas2012 said:

Again thanks Rish sir , now slighlty looks realising, if at expiry 7900 entire 465 will be if 8100 means 265 will be mine , ok ,
(1 ) but what the time decay plays here , if say tomorrow touches 7900 ( just for asking , no chance at all ) then all can square with whole profit?

(2 ) what if til expiry consolidates here and there beteen 50-100 pts and finally closes at same 8365 , nil gain for me ?

(3) what are the various probabilities of time decay in this trade ,


PLEASE , these are final questions , dont disturb you more and THANKS a lot for your replies sir , :clapping::clapping::clapping:

Click to expand...

hi

you will not gain anything by time decay in this trade.

regards

bcz this is selling ITM option ? does selling OTM will only have time decay ,?