hi,
I am new at options trading ( I prefer options over futures due to the risk spread). I have learnt the theory by studying at various places and now want to start my first steps.
I have icicidirect account and was wondering if anyone here could help me with the strategy (the icici help/support people did not understand options at all!!!)
Here are my questions (with HDFC as example):
1. Lots of options (for a given strike price) have NO estimated premium - why?
2. suppose I buy OPT-HDFC-26-May-2005-600-CA ; lot 300 ; LTP 15; strike price 600
So my total cost is 184500 + 1845 (brokerage @0.10%). I think in this case I now have to sit tight till May 26 - no other money has to be allocated in the account for covering this position . Two days later, I decide to sell off this option ( I have just bought) - how much money will I get and how much brokerage is taken (In this part I'm confused about premium)
3. Suppose I'm selling the same call option (that I did not have). I know that ICICI does not support covered option selling.
In this case, do I receive the 15 * 300 premium ? How much brokerage is charged?
After selling, suppose the price of share moves up - do I have to cover my sales with increased funds? how much?
4. On settling day, do actual delivery of shares take place - or is just the difference settled.
so if I haev bought OPT-HDFC-26-May-2005-600-CA of lot 300, will I get 300 shares , or is just the difference debited into my account.
If I have sold OPT-HDFC-26-May-2005-600-CA of lot 300, what will happen?
Thanks to all you gurus for reading and spending your time here.
I am new at options trading ( I prefer options over futures due to the risk spread). I have learnt the theory by studying at various places and now want to start my first steps.
I have icicidirect account and was wondering if anyone here could help me with the strategy (the icici help/support people did not understand options at all!!!)
Here are my questions (with HDFC as example):
1. Lots of options (for a given strike price) have NO estimated premium - why?
2. suppose I buy OPT-HDFC-26-May-2005-600-CA ; lot 300 ; LTP 15; strike price 600
So my total cost is 184500 + 1845 (brokerage @0.10%). I think in this case I now have to sit tight till May 26 - no other money has to be allocated in the account for covering this position . Two days later, I decide to sell off this option ( I have just bought) - how much money will I get and how much brokerage is taken (In this part I'm confused about premium)
3. Suppose I'm selling the same call option (that I did not have). I know that ICICI does not support covered option selling.
In this case, do I receive the 15 * 300 premium ? How much brokerage is charged?
After selling, suppose the price of share moves up - do I have to cover my sales with increased funds? how much?
4. On settling day, do actual delivery of shares take place - or is just the difference settled.
so if I haev bought OPT-HDFC-26-May-2005-600-CA of lot 300, will I get 300 shares , or is just the difference debited into my account.
If I have sold OPT-HDFC-26-May-2005-600-CA of lot 300, what will happen?
Thanks to all you gurus for reading and spending your time here.