butta_trader said:
Could u explain clearly
for the closing price higher and lower for CALL option and PUT option
Its like this...
Suppose
Nifty today at 2050 on Feb 1.
you sell Nifty Feb. 2150 Call option at 10 Rs. today. -- Some one bought 2150 Call from you.
Now,
your buyer - has 3 option
1) He comes to exercise his right, in middle.
Here, Exchange decide some seller like you & ask you to pay any diff.
1a) If nifty is at 1900. --- (Fool buyer - who is coming to exercise.) I think exchange will not allow this.
1b) If nifty at 2160 ----- (Buyer will ask for 10 Rs from exchange) & you have to pay that.
2) He sell his option.
3) Like you buyer wait for 26Feb.
3a) Nifty at 2140. --- You win. Buyer lose.
3b) Nifty at 2170 ---- You have to pay 20 Rs.
3c) Nifty at 2200 ---- You have to pay 50 Rs even you just got 10 Rs when you sold this call option.
Vijay.