Help me in understanding these Nifty Option !!!

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  #1  
Old 25th July 2007, 09:11 PM
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paisapower is on a distinguished road
Default Help me in understanding these Nifty Option !!!



Sold 200 NIFTY OI NSE 26JUL07 4300.00 CE @ 87 CMP=294

Buy 200 NIFTY OI NSE 26JUL07 4300.00 PE @ 45 CMP=1

Buy 200 NIFTY OI NSE 26JUL07 4400.00 PE @ 28 CMP=1


Can some one tell me how much loss/profit i would make on EACH call

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  #2  
Old 10th August 2007, 06:01 AM
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srikanth_kandalam is on a distinguished road
Default Re: Help me in understanding these Nifty Option !!!

This is precisely what I have been trying to raise awareness. You are basically buying options like you are buying stocks- and that in most cases will not make you money as what seems to be good suddenly changes.

You basically have provided very little info for anyone to venture a guess.

Let me ask you questions?

What do you expect IV will be when you square off ( increased or decreased by how Much)

When will you sell ( time)

What is the Delta of each of the options ( for calls ( bought) it is negative for Puts it is the mirror opposite- a number that will be between 0 and 1)?

What will Nifty be trading at when you sell.

YOu then have to add your transactions costs ( both ways)- and perhaps you can get the answer. But remember- these are the questions you always need to ask!

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