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| Discuss Newbie's Question on Options at the Options within the Traderji.com - Discussion forum for Stocks Commodities & Forex; Hi, I want to add my question here.Please help me! 1.Say I have Nifty March ... |
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#21
27th February 2006, 05:39 PM
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Re: Newbie's Question on Options
Hi,
I want to add my question here.Please help me! 1.Say I have Nifty March call 3100 premium 60(I dont know exact premium!) 2.Nifty goes to 3200 by march end. 3.What I have to do for a profitable trade? squre off the position before expiry, say for a premium of 100(I just gussed)and collect (100-60) * 100 =4000 or wait for expiry to be exercised to get (3200-3100)*100 = 10000,Is it possible? 4.If we do not square off the position will the exchange automatically exercise it?or I wiil lose the premium paid? Please help me. thanks 
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#22
27th February 2006, 06:41 PM
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Re: Newbie's Question on Options
Yes, in the money options are automatically exercised by the exchange on expiry.
Your profit in both cases will be the same. i.e. Rs. 4000. If you do not square off, you will be paid off Rs. 10000. Your profit will be less the premium paid (Rs. 6000). So your profit will be Rs. 4000.
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#23
27th February 2006, 09:22 PM
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Re: Newbie's Question on Options
Thanks a lot Ivan, for answering my question.
Also can u please tell me if the same position is in stock call options,if not squre off the position,I have to buy entire stock? or I will be credited with the difference amout (Higher spot prize - Strike prize)* market lot? thanks
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#24
28th February 2006, 09:52 AM
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Re: Newbie's Question on Options
No, you do not have to buy the stock. In India, futures & options are cash settled. You do not have to take delivery.
You will be credited with the difference amout (Higher spot price - Strike price)* market lot.
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#25
28th February 2006, 03:48 PM
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Re: Newbie's Question on Options
thanks Ivan!
And these too will be done automatically at the expiry day or we have to eplicitly specify to exercise,since stocks are american type? Can I ask questions about forex here? thanks
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#26
28th February 2006, 03:53 PM
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Re: Newbie's Question on Options
Yes, in the money options are automatically exercised, be they american or european.
Forex.... okay!!
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#27
28th February 2006, 04:15 PM
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Re: Newbie's Question on Options
thanks!
sicne today is budjet day I,m not entering the market.High volatility! About Forex... 1.I read a lot about forex, 1.5 trillion market, no centralised exchange,day and night trading, high leverage-so high risk,etc etc... 2.I searched for brokers..found refco(now Man financia?)sify,sait capital etc. someone pointed out marketiva and lot other foreign brokereages..forex.com,saxobank etc etc.. 3.I just looked the contact address to know the credibility of these companies and found some are in US, some has worldwide offices say uk cidney,japan etc.. 4. I didn't find larger companies like jp morgan etc and indian brokerages like ilfs,kotak,icici,indiabull etc are not offering these sevices? or do they? 5.If opened account with foreign comapnies,is my money is safe like I trade in equity in Indian brokers?Is there any tax or legal issue to open account with foreign companies? 6.Is there any Indian major broker available? 8.Overall is the money in foreign account really safe?
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#28
28th February 2006, 04:28 PM
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Re: Newbie's Question on Options
I thought you meant forex derivatives. Maybe this post should go to a section where there are people who are well versed in the forex market.
Sorry!
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#29
28th February 2006, 04:44 PM
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Re: Newbie's Question on Options
Thank you Ivan.
Any way can you tell me, whether I can do forex trading as equity and derivative trading,thats I am doing now through online from India?
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#30
28th February 2006, 04:51 PM
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Re: Newbie's Question on Options
I guess you can trade forex from India. I know Refco had a system (now Man Financial), so you can check with them. The big guys (JPM etc) wont offer forex to retail investors. RBI has an annual cap of $25000, so anything below that is fine.
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