As a result, at Nov expiry if market closes at 11000, we get 500 points from 10 lots of NOV 11500 PE (profit of other 10 gets adjusted against loss of10 NF) i.e. a total 5000 points. Plus, the premium that we are collecting, lets consider it to be a humble 100 points per lot, i.e. total 1000 points on 10 lots. Our initial investment is 4000 points, so this works out well: 5000+1000-4000 = 2000 points i.e. Rs.150000 over 2.5 months on an investment of Rs.9L, which is bearable.
That's the theory. Lets see what really happens, after all its Mr.Market we are dealing with.
That's the theory. Lets see what really happens, after all its Mr.Market we are dealing with.