doubt on put options

#1
Hi experts ,

I have a small doubt regarding put option.

I have bought tata motors put 760 at 10 rs thinking that market will fall but now market continuosly grown and it has come to 5.

My doubt is its expiry date is 25th march so if by means if it has become 0 tomorrow and day after tomorrow if icici scrip value decreases is there any chance of increasing the put value from 0 or it will be 0 only.
 

praveen taneja

Well-Known Member
#2
Hi experts ,

I have a small doubt regarding put option.

I have bought tata motors put 760 at 10 rs thinking that market will fall but now market continuosly grown and it has come to 5.

My doubt is its expiry date is 25th march so if by means if it has become 0 tomorrow and day after tomorrow if icici scrip value decreases is there any chance of increasing the put value from 0 or it will be 0 only.
Tata motors and ICICI are different companies and you would earn only if at expiry tota motors close below 750
as tata motors is now 785 and few days left pls decide ur sl as in options people fix sl at 50% max sad for ur loss god bless you
 
#3
thank u .

but i dint get u can u be clear what is ur opinion and my doubt is if it becomes zero will it grow again before 25th march or not.

plz clarify my doubt
 

praveen taneja

Well-Known Member
#4
thank u .

but i dint get u can u be clear what is ur opinion and my doubt is if it becomes zero will it grow again before 25th march or not.

plz clarify my doubt
you can only pray for a huge problem like govt fall, tata kidnap or US declare itself insolvent or Mayawati Run away with linkon bro or with vikas then u can think it can go below 740 where ur profit start it can go to 0 then 500 no problem but Hope is main enemy of traders like us:thumb:
 

rkkarnani

Well-Known Member
#6
thank u .

but i dint get u can u be clear what is ur opinion and my doubt is if it becomes zero will it grow again before 25th march or not.

plz clarify my doubt
Your Put option of Tata Motors shall cease to exist post March 25th, as it expires on that day!! This is what you yourself has mentioned. It does not matter whether the price goes to Zero anytime before 25th March and on 25th March if Tata Motor closes below 750.00 it will give you profit a rupee for a rupee below 750, not taking into account brokerage and other charges!!
 
#7
hi praveen

Hi,

This may be sad news as tata fell down for many but u said one word govt fall or tata kidnap nothing has happened but share value fallen just coz of dialmer exits .

thank god
 

rkkarnani

Well-Known Member
#8
Re: hi praveen

Hi,

This may be sad news as tata fell down for many but u said one word govt fall or tata kidnap nothing has happened but share value fallen just coz of dialmer exits .

thank god
Great going!!! Trust you booked profit as your Put must have doubled today!! It pays to be less greedy in options , more so near the expiry as there is no time value left in it and price shall move in tandem with the underlying. Also there is trading holiday tomorrow!! It may open with a Gap up on Thursday. Just my view andam least qualified to be taken seriously. :p
 
#9
hi vasu,

u bought tata motor put 760 @ 10 of march series. As per your have query, u r breakeven point is 750 spot price (strike price -premium paid) if on expiry telco closed below 750 then u will get back u r investment only(10).
If telco cloed @ 730 @ expiry then put premium will be 30 rs.

As per 23 march telco closed @ 739 so put value was 21.55 (strike price -spot price),so use this formula for 2maro n see u r expected pay out but dont hold position if telco gives expiry above 750.

Their is no relation with other stock changes with u r telco put option.
 

rkkarnani

Well-Known Member
#10
hi vasu,

u bought tata motor put 760 @ 10 of march series. As per your have query, u r breakeven point is 750 spot price (strike price -premium paid) if on expiry telco closed below 750 then u will get back u r investment only(10).
If telco cloed @ 730 @ expiry then put premium will be 30 rs.

As per 23 march telco closed @ 739 so put value was 21.55 (strike price -spot price),so use this formula for 2maro n see u r expected pay out but dont hold position if telco gives expiry above 750.

Their is no relation with other stock changes with u r telco put option.
My view would be to have booked profits on Tuesday when the High had reached Rs.25.00 , a profit of Rs.15 on an investment of Rs.10 is not bad by any standards. More so becoz the asset we bought (The 760 Put) would cease to exist beyond Thursday. Yes you may loose on profits if TataMotor opens gap down but the opposite could be true also.... a bird in hand......
Having said this if your view on Telco is still negative and expect it to go down further maybe you are correct. I have written what I would do or suggest to do is 'cash' the profits!!
It is advisable to have a Target when entering a stock.
Fear and Greed are both injurious to our Trade!!!
 

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