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what is ce pe

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  #1  
Old 18th July 2012, 02:28 AM
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Lightbulb what is ce pe

seniours'

i am new to options
don't know abc of it.

i want to know that if nifty is trading on 5250 than what is 5200 ce and 5300 significies

also what is pe means and what it significay if nifty is at 5250 than what is 5200pe and 5300 pe.

waiting for suggestions in indian way as i saw danny sir language is very dangerous for a common indian man who doen't know english more.

also sir in simple words how to play options as if in case of hedging how to use that.

looking forward for seniours help

i read in a thread that sg sir suggest some body to buy 2 nifty august contract and buy 1:2 of 30000 5200 ce and 5300 ce
what it means

thanks



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  #2  
Old 18th July 2012, 01:08 PM
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Default Re: what is ce pe

Basic info is available all over the internet Google helps.

CE= call European
PE = put European

Basically its contract.
IF you buy 5200 nifty CE means you bought contract to buy nifty at 5200 at expiry. In India options are cash settled . so at expiry if nifty is 5300 then 100 is your profit ( - premium i.e. price of contract).
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Old 18th July 2012, 01:36 PM
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Default Re: what is ce pe

ok this means if i buy 5200 ce and price at expiry is5100 than i get 100 rs loss
and if i buy 5300 ce and price is 5280 at expiry than i got 20 rs loss
thanks sunny ji for so simply explain
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Old 18th July 2012, 01:38 PM
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Default Re: what is ce pe

currently 5200ce is at 50 what it's mean
and 5300ce is at 14 what it's mean
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Old 18th July 2012, 01:39 PM
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Default Re: what is ce pe

1 se nifty me 50 rs ka farak padta hay
is ce may kitna farak padta hay
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Old 18th July 2012, 01:53 PM
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Default Re: what is ce pe

Quote:
Originally Posted by labdhi View Post
ok this means if i buy 5200 ce and price at expiry is5100 than i get 100 rs loss
and if i buy 5300 ce and price is 5280 at expiry than i got 20 rs loss
thanks sunny ji for so simply explain
Quote:
Originally Posted by labdhi View Post
currently 5200ce is at 50 what it's mean
and 5300ce is at 14 what it's mean
I will correct you here. when buy option contract your maximum loss become fixed. that is the premium you paid.

like above : 5200 ce at 50 mean 5200 ce contract is available for 50 rs...( nifty contract is 50 so ...50x50=2500 rs.) this 50 rs. called premium. same with 5300 ce

so if you buy 5200 ce and at expiry nifty is at 5100 ...you dont incur 100 loss..but the premium you paid example 5200 ce at 50..you incur max loss of 50.
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Old 18th July 2012, 02:07 PM
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Default Re: what is ce pe

so cool sir
kya soda expiry kay pahlay bhi cut kar saktay hay kya
also if it is now 50 and i buy it than after 3 days it become 70 than is 20*50=1000 is my profit sir can i cut at that time sir.

r u frm hyderabad sir
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Old 18th July 2012, 02:12 PM
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Default Re: what is ce pe

you cannot cut but you sell your contract in the same way you bought it. so yes you will have profit of 1000 on that
nobody waits till expiry even if its in profit...becuae once contract is exercised ..the govt will levy STT..which is huge ..so people sell it on expiry day if its in profit.

( and remember PE is contract to sell the underlying )

I am from bangalore


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