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Query regarding Square off

Discuss Query regarding Square off at the Options within the Traderji.com - Discussion forum for Stocks Commodities & Forex; Originally Posted by rickyric_ny Help needed....Would like to know on excerising an option should I ...


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  #11  
Old 17th November 2006, 07:12 AM
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Default Re: Query regarding Square off

Quote:
Originally Posted by rickyric_ny View Post
Help needed....Would like to know on excerising an option should I need a Full cash in my account.

say for example: spot price IVRCL 340

I am buying IVRCL-350-dec-ca is 5. ie. 5 x 1 lot = 5000 premiun. spot price for IVRCL went to 385 and premium of IVRCL-350 now is 20. I would like to excercise the option, I am not interested to take delivery of the shares. Should I need 3,50,000 in my account to excerise this option or 35000 - 5000 (premium) = 30000 or 35000 - (20000 - 5000) = 20000 gets credited in my account...(as like daytrading....).
If you have purchased the said option , if you square off you make 20-5=15x lot size.

If you excercise you make 385-350= 35xlot size . you forego the premium paid.

You do not need margin to square off or excercise.
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  #12  
Old 17th November 2006, 07:15 AM
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Default Re: Query regarding Stop Loss

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Originally Posted by kvvighnesh View Post
Hi to everybody!
I am just entering into stock market. Last 4 months I am doing daily trading. (Call it Intra Day). Still I don't know about options and derivatives. I am doing trading trhough 5paisa and Sharekhan (two sharks in the ocean_). There software not good of design and customer friendly. I encounter certains problems, could any experienced learned member explain me the following perstering questions.?
1. I understand Stop loss means when buy limit order it should be less than order price and for sell it should be greater than the order price. Eg:: Sail LTP 89 Open price is 92 During market time one enter such as 300 units at 93 and Stop loss enterd as 90.? Please explain after accepting order at 93.25 and the price goes little up to 94 and then coming down to 90 and then it goes up again to 90.15 finally it starts its course down to 86. In this example the first time when it approached to 90, the stop order should have been executed or not. Or should I have to modify to sell at market price. In the example taken, it has not sold at 90 or even less i.e second time when it fall below 90. Can anyone explain me correctly. K.V.vighnesh email: kvvighnesh@*****.co.in Chennai.

If you are going to enter a s/l limit order it will only get executed if your limit price is reached. It is always preferable to put in a s/l order at market.
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  #13  
Old 17th November 2006, 07:37 AM
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Red face Re: Query regarding Square off

Quote:
Originally Posted by vince View Post
If you have purchased the said option , if you square off you make 20-5=15x lot size.

If you excercise you make 385-350= 35xlot size . you forego the premium paid.

You do not need margin to square off or excercise.
thanx vince. So as per your statement, I dont need 3,50,000(full price) in my account to excercise the option. Am I right?
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  #14  
Old 17th November 2006, 07:39 AM
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Red face Thanx Vince . . . .

Quote:
Originally Posted by vince View Post
If you have purchased the said option , if you square off you make 20-5=15x lot size.

If you excercise you make 385-350= 35xlot size . you forego the premium paid.

You do not need margin to square off or excercise.
thanx vince. So as per your statement, I dont need 3,50,000(full price) in my account to excercise the option. Am I right?
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  #15  
Old 17th November 2006, 09:37 AM
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Default Re: Thanx Vince . . . .

Quote:
Originally Posted by rickyric_ny View Post
thanx vince. So as per your statement, I dont need 3,50,000(full price) in my account to excercise the option. Am I right?
Absolutely Right.
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  #16  
Old 17th November 2006, 09:50 AM
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Default Re: Query regarding Square off

Quote:
Originally Posted by vince View Post
If you have purchased the said option , if you square off you make 20-5=15x lot size.

If you excercise you make 385-350= 35xlot size . you forego the premium paid.

You do not need margin to square off or excercise.
Vince,

I'm too learning options.

So in this case, exercising the option will give twice the profit as compared to trading(ie selling the option) it?

Trading: Profit# 20-5=15*lotsize
Exercising: Profit# 385-350=35*lotsize - 5*lotsize(5 is premium paid) = 30*lotsize

So the profit is double in the later case?

Praveen.
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  #17  
Old 17th November 2006, 10:57 AM
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Default Re: Query regarding Square off

It seems so , if the figures given above are correct.
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  #18  
Old 17th November 2006, 11:33 AM
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Default Re: Query regarding Square off

Quote:
Originally Posted by vince View Post
It seems so , if the figures given above are correct.
Ok, Thanks
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  #19  
Old 24th November 2006, 09:56 AM
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Default Re: Query regarding Square off

Hi everybody
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  #20  
Old 25th November 2006, 07:53 AM
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Question Thanx Vince for Replying to my previous......

Just want to know that is this true :

(a.) Exercising an option takes place only at evening???. for eg. If i excercise an option say a script is in Rs.30 profits on morning at 11.30 am and the script falls down with a loss of Rs.30 at 3.00 pm. I excercised my script at 11.45 am. Will I get into loss???? . As Excercising happens only at 4.00 pm.

(b.) Excercising happens immediately just like transaction of shares???? and I would get in profits.
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