Hi Friends
please explain this case :
assumptions :
if a derivative named xyz stock price Rs.300
suppose its premium value is Rs.30
if i found that this is going to down up to Rs. 250 and i purchased put(PE) for 2 lots with expiry date 30-05-2013
by market fluctuations it dropped to 250 say up to 25-05-2013
what will happen? what i have to do with this put ? i have to sell this put option? or it is mandatory to wait up to expiry date?
"And also tell me can a small trader can buy 10,20,30.... instead of a lot of size 125,250,1000 .... as small trader cannot afford that much huge buy to lose big money"
any well known or experienced options trader could explain this , will be appreciated
please explain this case :
assumptions :
if a derivative named xyz stock price Rs.300
suppose its premium value is Rs.30
if i found that this is going to down up to Rs. 250 and i purchased put(PE) for 2 lots with expiry date 30-05-2013
by market fluctuations it dropped to 250 say up to 25-05-2013
what will happen? what i have to do with this put ? i have to sell this put option? or it is mandatory to wait up to expiry date?
"And also tell me can a small trader can buy 10,20,30.... instead of a lot of size 125,250,1000 .... as small trader cannot afford that much huge buy to lose big money"
any well known or experienced options trader could explain this , will be appreciated
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