I an novice for f &o. Plz help me

#1
Hi,
Friends, I have enough knowledge about equity but I am novice for F&O.

I bought "OPTIDX-NIFTY-31DEC2009-5000-CE" on 27/11/09 @105 and sold it same day @126.55.
Is it necessary to buy this series once again before expiry date.
As one of my friend told me that I cannot sale before expiry date.

Can a person buy or sell "NIFTY OPTIDX" any day before/on expiry date ???????

Please help me ASAP.
Thanks in advance.
 
Last edited:

anuragmunjal

Well-Known Member
#2
hi..
u have already booked ur profit in the above mentioned trade . u need not do anything else.
yes a person can buy or sell nifty options any day before/ on expiry day.

regards
Anurag
 
#3
Thanks a lot!!!

But one of my friend told me that OPTIDX-NIFTY can only sell on expiry date because option style for OPTIDX-NIFTY is European not American.
Please clear this doubt.

Thanks once again.
 

anuragmunjal

Well-Known Member
#4
hi..
ur friend is mistaken . that is not the case.
nifty options (ce) are european.u can buy/ sell anytime and u can square off at any time. if u donot square off within the month, it will get automatically squared off on the clearing day with the closing price of the underlying ( in this case nifty).
stock options (ca) are american. they follow the same pattern with the only exception that here the buyer can anyday get the option excercised after the close . this would happen mostly in the case of deep in the money options which do not have any extrinsic value.

regards
Anurag
 

bunny

Well-Known Member
#5
Balaji,
Options can be used in two ways:
  1. Trading options just like you would trade shares
  2. Exercising options
What you did, i.e. bought @ 105 and then sold @ 126, is trading options.

The other thing, called exercising options means you actually buy or sell according to your option.

Ex: Buying "RELIANCE CALL 1000" gives you the right to buy RELIANCE at Rs. 1000 even if the current price at that time is Rs. 1200. This is called as "exercising" your option.

What your friend told you was about exercising options. There are restrictions on exercising options, such as, some can be exercised only on the expiry day, while some can be exercised anytime until expiry(American and European as explain in above post by Anurag Munjal)
 
#6
dear sirs,
which software is useful for the use of stoploss buy & sell.The buy & sell prices are notified if the price comes it will go and buy.also suggest which language useful for this type of commands
 

bunny

Well-Known Member
#8
Thanks Anurag!
"I can Square-off at any time." What exactly does it mean in case of OPTIDX-NIFTY.
I buy/sell only in cash.

Thanks.
In cash segment, unless you are doing intraday, you will have to wait for the shares to get delivered to your demat account and only after that you can square-off.

However, in case of derivatives, there is no delivery. You can close a contract at any moment after opening it.
 
#10
Hey bunny ,

In his case, how much profit he made , 126.55-105 = 21.55 X 50 = 1077.5

explain me profits in options depends on what premium or even closing of nifty ?

i mean if he bought 5000 CE and @ expiry it closes 5300.

how profits r calculated.

Thanks
 

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