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Newbie's Question on Options

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  #81  
Old 9th October 2008, 08:12 PM
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Default Re: Newbie's Question on Options

Dear friend,

Is shorting selling all option or buying put option
BUY PUT if you want to short sell(Bearish).
BUY CALL if you want to go long(Bullish).


It is said that selling does not require beforehand buying then what are the problems with selling (how do we get profit by selling) pls explain with example
Yes short selling doesn't required prior buying. You can sell first and buy later.
If you SELL at a higher price and BUY when the price goes down, you will get the difference as profit.


also can we buy only one lot I am thinking of shorting mini nifty as it has lower number of shares hence lower risk for beginners like me
Yes. You can buy in multiples of lot only.
For example: You can buy 1 lot or 2 or 3 like that....


Is margin requirement means we have to put 25% amount(ICICI Account) in our account or should we give the amount to broker's account
Need to have the margin amount in Broker account.

Does Squaring off and exercise results in two trades or single trade
Square Off is the second leg of a single trade. You will be charged brokerage for opening as well as squaring off the position as per your broker. If you are Exercising, brokerage will not be charged for the second leg.

For example:
In case of Long:
1st leg : Buying - Brokerage charged
2nd leg: Square off or Exercise.

Remember there may be exercise charges.


Hari.
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  #82  
Old 13th October 2008, 06:39 PM
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Default Re: Newbie's Question on Options

Hari,
Pls answer my last thread,
Thanks
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  #83  
Old 17th October 2008, 05:28 PM
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Smile Re: Newbie's Question on Options

for a newbie , isnt buying call option the safet trades .

& then ,

short in nifty futures to remain hedged .
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