Newbie's Question on Options

vince · #41 12th March 2007, 06:51 PM

Quote:

Originally Posted by musicjunkie

Hello all,
I like most here have never traded in derivatives but am very interested and trying to read as many books as possible. I had a few questions,
1) Does the futures market have a lot size of 100 each per contract or its the standard size like Option which change quite often?
2) And is there a minimum amount in need to place an order with? or it it that i can trade the minimum lot size.
3) do ihave to put up margin while writing options also? the margin turns out to be quite alot, i trade in icici (i know) and they ask for 25% initial.

I hope i was clear with the above questions

Hello musicjunkie,

Please check this link for lot sizes http://www.nse-india.com/content/fo/fo_mktlots.htm

You can trade with the minimum lot size.

Yes you do have to put up margin to write options. The amount varies from broker to broker.

regds

musicjunkie · #42 12th March 2007, 07:20 PM

Thank you vince, your advice much appreciated, respect++

beginner_av · #43 13th March 2007, 10:33 AM

hey music...if u like vince's post so much...why dont u add some reputation points for him?

sattimes · #44 16th May 2007, 11:42 AM

hello everybody.

can v buy a call option of a stock and sell it on the same day assuming i am in gain?

if v can't, then after how many days v can sell or excercise it? ie T+2 or T+3?

i use ICICIDIRECT

thanks in advance

Satish

supaTrade · #45 9th June 2007, 12:24 PM

Hello,

If I the spot price of XYZ is Rs 156. And I want to buy a call option at 160 with premium of Rs. 3 and lot size is 100 shares. What will be the amount I need in brokerage account to buy the option?

How is brokerage calculated? Please explain.

chander_rb · #46 9th June 2007, 04:42 PM

Quote:

Originally Posted by supaTrade

Hello,

If I the spot price of XYZ is Rs 156. And I want to buy a call option at 160 with premium of Rs. 3 and lot size is 100 shares. What will be the amount I need in brokerage account to buy the option?

How is brokerage calculated? Please explain.

Hi,

That depends upon which brokerage house you use to trade thru.

I trade thru HDFC Securities and with them it is based on the either Rs.100 per lot or 2.5% on the actual premium whichever is higher.

So, it will be either Rs.100 or 0.025 x 3 x 100 = Rs.7.50. So, you will have to pay Rs.100/- (the higher amount). Plus the STT. With some brokerage houses, additionally you will have to pay Stamp Duty, Turn Over Tax, Education Cess etc.

Is it correct guys?

Regards.

arbeecee

supaTrade · #47 9th June 2007, 08:24 PM

Thanks for the clarification chander. U r great

Quote:

Originally Posted by chander_rb

Hi,

That depends upon which brokerage house you use to trade thru.

I trade thru HDFC Securities and with them it is based on the either Rs.100 per lot or 2.5% on the actual premium whichever is higher.

So, it will be either Rs.100 or 0.025 x 3 x 100 = Rs.7.50. So, you will have to pay Rs.100/- (the higher amount). Plus the STT. With some brokerage houses, additionally you will have to pay Stamp Duty, Turn Over Tax, Education Cess etc.

Is it correct guys?

Regards.

arbeecee

bandlab2 · #48 20th August 2008, 07:42 AM

if i am a option call buyer, what o excersize and square-off mena to me? are there any diferences ? i am talking about stocks which are of american type. not the indexes. for example ranbaxy spot is at 500, i buy sept call 400 strike at 100. now the spot goes to 530 an call goes to 132. can i square-off ? can i excersie ? what are the advantages , disadvatages to e as a buyer ?

pasha · #49 20th August 2008, 12:09 PM

Quote:

Originally Posted by bandlab2

now the spot goes to 530 an call goes to 132. can i square-off ?

Yup, sell an equal number of 400 strike calls

Quote:

Originally Posted by bandlab2

what are the advantages , disadvatages to e as a buyer ?

Looks like the seller has the disadvantage as positions may be closed anytime by a buyer and he will only know at the end of the day.

MYACCOUNT · #50 28th August 2008, 05:16 PM

OPTION & MY DOUBT ABOUT OPTION

PLEASE ANSWER THE FOLLOWING QUESTION

CALL OPTION

1) If I Think That A Particular Script Will Go Up , And I Buy A Call Option Of The Script, And If It Goes Up Then

I Will Get Profit Is It Right ( Yes / No ) , But I Also Want To Know Whether The

A) Premium Will Increase
B) Premium + Strike Price Will Increase
C) Only Stick Price Will Increase

PUT OPTION

2) If I Think That A Particular Script Will Go DOWN , And I Buy A PUT Option Of The Script, And If It Goes DOWN Then

I Will Get Profit Is It Right ( Yes / No ) , But I Also Want To Know Whether The

D) Premium Will Increase
E) Premium + Strike Price Will Increase
F) Only Stick Price Will Increase

I Have Heard ( In General ) That After 10th Of Every Month The Premium / Strike Price / Both Will Go Down Is It True

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