need help in option(fno)!

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  #1  
Old 13th April 2006, 12:26 AM
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narayan78 is on a distinguished road
Question need help in option(fno)!



hi there pls help me i am new to option just few questions.

buying option expires as the contract closes.


1. can i sell call option ? when will the contract will expire for selling call option.

2.in nifty call option is that compulsory that i have to wait till the expirty date to sell . or can i sell it before.

sometimes it is funny for u to read!
but i am a newbie!

advance thanks for u
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  #2  
Old 13th April 2006, 06:22 AM
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VICKY_SEEKINGINR is on a distinguished road
Red face Re: need help in option(fno)!

Quote:
Originally Posted by narayan78
hi there pls help me i am new to option just few questions.

buying option expires as the contract closes.


1. can i sell call option ? when will the contract will expire for selling call option.

2.in nifty call option is that compulsory that i have to wait till the expirty date to sell . or can i sell it before.

sometimes it is funny for u to read!
but i am a newbie!

advance thanks for u
I dont know much about option but I trade in NIfty Calls/pts
So I thought I can answer ur query.

YEs we can Sell call? ( I think also called short )

WE can sell it before expiry not after exppiry

thanx
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  #3  
Old 13th April 2006, 07:45 AM
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mfire is on a distinguished road
Default Re: need help in option(fno)!

Hallo
We can square off our position any time during the contract in optons. I usually deal in nifty options. I had also similer problelms but by asking those could be solved. Do not hesitate to ask your problems members of this forum are very cooprative.
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  #4  
Old 13th April 2006, 10:06 AM
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Default Re: need help in option(fno)!

Narayan78,

Though your questions are not clear,

You can aquare off your purchased options at any time.

You can short sell an option if you have the required margin in your account.

All F & O contracts expire on the last thursday of the month automatically if not squared off.
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  #5  
Old 13th April 2006, 02:04 PM
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Default Re: need help in option(fno)!

Hi all !

How does one ascertain the fair value of an option ?

The problem arises when one buys an option and finds it losing value even when underlying has gained !!

Please advise. Thanks.
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  #6  
Old 13th April 2006, 02:27 PM
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Default Re: need help in option(fno)!

The black schloes option calculator is normally used to calculate the fair value of an option.
All you have to do is feed in the required fields.
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  #7  
Old 13th April 2006, 08:12 PM
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Default Re: need help in option(fno)!

Vince, thanks for your response. B/S calc is very well-known but rarely gives the real picture. I'm sure the market pros who're making regular money from options do not use B/S.
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  #8  
Old 14th April 2006, 07:32 AM
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Default Re: need help in option(fno)!

The b/s is used to determine the fair value of an option. However there will always be a difference between the theoretical and market value because different traders will have a different perception of mainly the volatility and other inputs required to calculate the same.

Please do not be under the illusion that people are making money because of a particular option calculator they use.
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  #9  
Old 14th April 2006, 12:56 PM
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Default Re: need help in option(fno)!

Vince, you're right. I had forgotten that market psychology does not always follow theoritical models. Thanks for the clarification.
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  #10  
Old 14th April 2006, 01:30 PM
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Default Re: need help in option(fno)!

Hi All,
as I am also new inthis field of options:

please advice am asking the same question:

Question 1-Suppose I buy a niffty call(CA) today can i sell it tomorrow??

question 2- suppose i buy a niffty put(PE) today shall i square off tomorrow??

or shall i have to hold it till expiry:

Second query:
if i buy a put and sell it off tomorrow will it be considered as two open positions in the market because it has not reached its expiry date.

I request you all investors to clarify the details : can we or can we not..

all comments are welcomed...

thanx

regards,

rahul_trader
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