Low Risk Options Trading Strategy - Option Spreads

[cool_kk]

Yeah... I was thinking of taking some profit from this trade..
I guess. I am safe with overall positions as my loss will be offset by other call and put sold..
I am closing my 5500 position today

Thanks..

Position 5500 CE closed.. so no more hic ups..

5400 CE buy is opened.. I am looking into to close today... or early next week

If spot price is 5520 this expiry and I don't close this position
I will be getting 50*120 (1lot) without brokerage..
This assumption is right ?

Thanks traders for useful comments..

 

[PGDIMES]

Position 5500 CE closed.. so no more hic ups..

5400 CE buy is opened.. I am looking into to close today... or early next week

If spot price is 5520 this expiry and I don't close this position
I will be getting 50*120 (1lot) without brokerage..
This assumption is right ?

Thanks traders for useful comments..

The answer is 0...

 

[cool_kk]

The answer is 0...

At expiry, timevalue becomes zero and hence your option is settled at intrinsic value .. which is for put = strike price - settlement price.

I guess for call---> settlement price - stricke Price

There will be intrinsic value of 5400 CE
which is 5520-5400=120

If spot price is 5520

why 0 ?

 

[PGDIMES]

At expiry, timevalue becomes zero and hence your option is settled at intrinsic value .. which is for put = strike price - settlement price.

I guess for call---> settlement price - stricke Price

There will be intrinsic value of 5400 CE
which is 5520-5400=120

If spot price is 5520

why 0 ?

What will be your profit then???

 

[cool_kk]

What will be your profit then???

yes, profit will be zero + brokerage so negative that way

I was just saying that there will be intrinsic value .. No money will be lost except brokerage..if spot is 5520 at expiry

Do you know at settlement brokerage is charged by ICICI.. ?
I will confirm with them next week and base on that close the position.

Thanks

 

[PGDIMES]

yes, profit will be zero + brokerage so negative that way

I was just saying that there will be intrinsic value .. No money will be lost except brokerage..if spot is 5520 at expiry

Do you know at settlement brokerage is charged by ICICI.. ?
I will confirm with them next week and base on that close the position.

Thanks

Sorry cool_kk, I misinterpreted your query. Whenever in a trade I think about the %(or absolute) profit/loss, not about how much I will get. Coming specific to your query, you were absolutely right about the price at expiry.

But 2 things should be understood here...
The charges like STT and others on options at expiry is calculated not on the premium but on notional value...For the same reason, you will find that options will be trading at a discount to their intrinsic value on the day of expiry...

 

[ksesha]

Don't know about ICICI, but HDFC does funny thing. They claim to not charge brokerage and STT, but deduct money in the name of settlement charges, which is more or less equivalent to brokerage amount.

Instead of asking whether they charge brokerage, ask plain simple whether they charge/deduct any money whatsoever.

yes, profit will be zero + brokerage so negative that way

I was just saying that there will be intrinsic value .. No money will be lost except brokerage..if spot is 5520 at expiry

Do you know at settlement brokerage is charged by ICICI.. ?
I will confirm with them next week and base on that close the position.

Thanks

 

[Capricorn]

yes, profit will be zero + brokerage so negative that way

I was just saying that there will be intrinsic value .. No money will be lost except brokerage..if spot is 5520 at expiry

Do you know at settlement brokerage is charged by ICICI.. ?
I will confirm with them next week and base on that close the position.

Thanks

Square off buddy, don't exercise. STT is much higher on ITM exercised options.

 

[cool_kk]

Square off buddy, don't exercise. STT is much higher on ITM exercised options.

Thanks guys!
I squared off.. brokerage was 100 + 10 RS... so profit was very less

 

[vssoma]

dear,
i entered below trade on 18th of this month, pls. check below....
Buy NF aug. @ 5437
Sell Sep. 5400 CE @ 132
Buy aug. 5200 PE @ 5.8

now ( 23-AUG-2010 10:24:19 Hours IST)
NF @ 5533
Sep. 5400 CE @ 192
aug. 5200 PE @ 1

what should i do now....exit or wait for some time.