In-the-money Options trade.

[darshanshukla]

Re: MtoM for Options

Dear PP
If you will sell put of 5700 now means you want have expected that NF will not give monthly close below (5700-724=4976) so if it will close below 4976 you will have to pay the amount as per close...
If it will close above or at 4976 you will get (724*50= Rs.36200) premium which you have received already.
Option writer are boss of the market and they know exact point of reversal dear... take care before writing such a in the money PUT
I hope you have understood what I mean to say,
Happy trading ahead.
Darshan

Thanks a lot for such a gr8 response.
First let me clear on thing is - I am not showing any strategy here, I just want to understand the M2M for options when you Sell Put Options. This is because I have read on NSE website that M2M is not applicable for Options and I got confused. (http://www.nseindia.com/content/nsccl/nsccl_forep1.htm - Value 4 description.)

If you can show me the M2M for following options would be gr8. Thanks in advance.

Sell Short NIFTY Jan2012 St Px: 5700 @ 724.10. I dont want to suqare-off this trade. and allow it to exercised on 25 Jan.

 

[ppandya]

Brokerage charges for NIFTY CE/PE?

Hello, Does anyone one know the standard brokerage charges for Buying/Selling NIFTY CE/PE?

 

[Madhusnair]

Re: Brokerage charges for NIFTY CE/PE?

@ppandya--- Charges involved in buy/sell contract for Options are brokerage + taxes (STT,Edu Cess, Stamp Duty, Sebi charges, Service taxes etc). So check with your broker as to what are you charged.

 

[SawViper]

Re: Brokerage charges for NIFTY CE/PE?

Hello, Does anyone one know the standard brokerage charges for Buying/Selling NIFTY CE/PE?

Go for the cheapest one. I got ripped off by IB. Now I use RKG. For charting, I subscribe to one of the RT data vendors and do TA on Amibroker. They charge Rs.9/- per lot but in the end it comes to around Rs.20/- a lot each way (incl. the mysterious "Transaction Charges" and other govt. mandated taxes).

 

[gunsho]

Re: Brokerage charges for NIFTY CE/PE?

Started using Zerodha recently and quite satisfied with the same. Brokerage is per trade 20. Beneficial when you trade more then 2 lots.

 

[ppandya]

What is Net Premium in Options?

I have read following about Net Premium for Options. Does this apply every day on Put and Call? Could some one pls expalin. Thanks in advance.


Value 2: Net Premium
In case of futures contracts, the value is zero.


In the case of options contracts, the value is the day's sell value minus the day's buy value.


The value is provided with the appropriate sign convention Payable (-)/ Receivable (+).


The value represents premium settlement amount receivable or payable by the member.

 

[ppandya]

Re: Brokerage charges for NIFTY CE/PE?

Thanks dude.....

Started using Zerodha recently and quite satisfied with the same. Brokerage is per trade 20. Beneficial when you trade more then 2 lots.

 

[ppandya]

Re: MtoM for Options

Dear SG,

I am still not clear on the M2M questions which I published below. I think this time I have provided the resonable example. Could you please provide your response......thanks again.

Thanks a lot for such a gr8 response.

First let me clear on thing is - I am not showing any strategy here, I just want to understand the M2M for options when you Sell Put Options. This is because I have read on NSE website that M2M is not applicable for Options and I got confused. (http://www.nseindia.com/content/nsccl/nsccl_forep1.htm - Value 4 description.)

If you can show me the M2M for following options would be gr8. Thanks in advance.

Sell Short NIFTY Jan2012 St Px: 5700 @ 724.10. I dont want to suqare-off this trade. and allow it to exercised on 25 Jan.

 

[trader.trends]

Re: MtoM for Options

Dear SG,

I am still not clear on the M2M questions which I published below. I think this time I have provided the resonable example. Could you please provide your response......thanks again.

ppandya

The exchange announces a settlement price everyday for all options. If the settlement price is higher than your shorting price, then you have to pay the difference between the two. If you have shorted one lot at 700/- and today's settlement price is 800 then your account will be debited by 100*50 for each lot you have shorted. Some brokers will adjust the MTM as a margin on the new position and not the entire 5K. Check with your broker for correct figures.

 

[ppandya]

Re: MtoM for Options

Thanks for such a great explanation. Does this apply for Buy position?

ppandya

The exchange announces a settlement price everyday for all options. If the settlement price is higher than your shorting price, then you have to pay the difference between the two. If you have shorted one lot at 700/- and today's settlement price is 800 then your account will be debited by 100*50 for each lot you have shorted. Some brokers will adjust the MTM as a margin on the new position and not the entire 5K. Check with your broker for correct figures.