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  #1  
Old 7th September 2008, 10:47 AM
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Default Doubt. Please Help
Hi Guys,

Lets say I sell a Nifty 4500 Call Option at Rs.100.
And the nifty closes at 4590 on the last day.

I have not squared off my position.

So does this mean that I keep the full premium collected?

- Brijesh
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Old 7th September 2008, 11:21 AM
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Default Re: Doubt. Please Help
Quote:
Originally Posted by deedeed View Post
Hi Guys,

Lets say I sell a Nifty 4500 Call Option at Rs.100.
And the nifty closes at 4590 on the last day.

I have not squared off my position.

So does this mean that I keep the full premium collected?

- Brijesh
No ,you are selling a call which will be Rs 90 in the money (4590-4500) on expiry day and your a/c will be debited by Rs 90/- X the Qty sold.You have collected Rs 100 as premium less this debit of Rs 90 hence your profit will be Rs 10 less brokerages.

Best Wishes,

Smart_trade
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Old 7th September 2008, 11:46 AM
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Default Re: Doubt. Please Help
how can he be still in profit when he sells a 4500call and nifty closes at 4590?
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  #4  
Old 7th September 2008, 12:28 PM
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Default Re: Doubt. Please Help
Quote:
Originally Posted by rinku4142 View Post
how can he be still in profit when he sells a 4500call and nifty closes at 4590?
He has collected Rs 100 as premium my dear !!! 100premium collected -90 the debit on expiry = Rs 10 Less brokerage as profit.

Best Wishes,Trade well !!!

Smart_trade
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Old 8th September 2008, 08:59 AM
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Default Re: Doubt. Please Help
Quote:
Originally Posted by gauravsahdev86 View Post
hi..
i have some doubts about call writing..fir of all can anyone explain me the word "excercise",what is call excercising
sencondly if i sell 4800 call@10,so can i cover it any time..??? or i have to wait till expiry..???
Are you are talking about Nifty 4800 call which you want to write ? Index option can not be exercised before expiry but can be squared off anytime before expiry. Stock options can be exercised by the buyer anytime before expiry. There is a little difference between exercising and suaring off. Exercising means forcing the seller to pay while squaring off is done in the market if one gets a buyer for the option you want to square off.
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