hi clarification needed in Options.

#1
hi Masters & Seniors,

I m Prakkash, I m completely new to this hope i will learn a lot here and start my journey in the world of stocks and options.

My main interest is in options.

I have some doubts in Options.Could u guys plz take some time to clarify them.
Q1. can i buy and sell a call option(Call America)contract on the same day ?

(ex: If i a buy a call CA of xyz company with a strike price of 120 at 10 am on monday morning with a premium of Rs2.20 say lot of 4124.The premium rised to Rs3.20 same day can i squeare off on the same day and make my profit of rs 1 on each share i.e Rs4124*3.20-2.20=Rs4124 or should i wait for some period)

Q2. If i sell the call Option (square off ) only to make the money in price rise of premium,will i be obliged to deliver the shares to the buyer of my Call option?

Q3. why some contracts BSP and BBP will have wide gaps ? ex BBP=6 BSP+12.30. Should we avoid such socks ?

Q4.how doe we intreprete Open Interest shouldit be high or low ?

Please clarify my above doubts.
Thanx in advance
Prakkash
 

rkkarnani

Well-Known Member
#2
hi Masters & Seniors,

I m Prakkash, I m completely new to this hope i will learn a lot here and start my journey in the world of stocks and options.

My main interest is in options.

I have some doubts in Options.Could u guys plz take some time to clarify them.
Q1. can i buy and sell a call option(Call America)contract on the same day ?

(ex: If i a buy a call CA of xyz company with a strike price of 120 at 10 am on monday morning with a premium of Rs2.20 say lot of 4124.The premium rised to Rs3.20 same day can i squeare off on the same day and make my profit of rs 1 on each share i.e Rs4124*3.20-2.20=Rs4124 or should i wait for some period)

Q2. If i sell the call Option (square off ) only to make the money in price rise of premium,will i be obliged to deliver the shares to the buyer of my Call option?

Q3. why some contracts BSP and BBP will have wide gaps ? ex BBP=6 BSP+12.30. Should we avoid such socks ?

Q4.how doe we intreprete Open Interest shouldit be high or low ?

Please clarify my above doubts.
Thanx in advance
Prakkash
Please avoid multiple posts!!
 

nac

Well-Known Member
#3
Q1. can i buy and sell a call option(Call America)contract on the same day ?
(ex: If i a buy a call CA of xyz company with a strike price of 120 at 10 am on monday morning with a premium of Rs2.20 say lot of 4124.The premium rised to Rs3.20 same day can i squeare off on the same day and make my profit of rs 1 on each share i.e Rs4124*3.20-2.20=Rs4124 or should i wait for some period)
Yes, you can buy and sell a call option on the same day.
Q2. If i sell the call Option (square off ) only to make the money in price rise of premium,will i be obliged to deliver the shares to the buyer of my Call option?
You are obliged to deliver only if it reaches the strike price. (But here in our country its cash settled)
Q3. why some contracts BSP and BBP will have wide gaps ? ex BBP=6 BSP+12.30. Should we avoid such socks ?
Sorry I couldn't help you in this...
Q4.how doe we intreprete Open Interest shouldit be high or low ?
It does need to be high or low. With OI we can speculate strength of the trend. Some of our TJ member who are trading in derivatives will help you in this regard in detail
 

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