Hello friends,
I am new to F&O.
I would like to trace virtually my 2 call options just to make clear understanding of what happen if i make order for them.
Right now , Tata motors closed at 415 Rs. at 1 Nov,2004.
25 Nov 2004 - CA - 400Rs is available at premium of 24 Rs.
25 Nov 2004 - PA - 400Rs is available at premium of 6 Rs.
Suppose i buy
1 lot of 25Nov-CA@400 by paying 24Rs. &
1 lot of 25Nov-PA@400 by paying 6 Rs
And Lets say on 25 Nov... Tata Motor is trading at
1) 390
2) 394
3) 400
4) 410
Then in all 4 cases, which of my order will get executed ? which options will expire without execution.
Well, i understand for the same example if i buy
25Nov-CA@440 at 4.30 Rs today...
1) If on 25Nov, it is trading at 430
------------- I know, this contract will expire without execution & i will loose 4.30 Rs / share, for 1 lot of 815 Shares.
2) If on 25Nov, it is trading at 450
------------- I will make profit of 10-4.30 = 5.70 Rs per share for 1 lot (815 shares).
Thanks in advance for your reply.
Vijay.
I am new to F&O.
I would like to trace virtually my 2 call options just to make clear understanding of what happen if i make order for them.
Right now , Tata motors closed at 415 Rs. at 1 Nov,2004.
25 Nov 2004 - CA - 400Rs is available at premium of 24 Rs.
25 Nov 2004 - PA - 400Rs is available at premium of 6 Rs.
Suppose i buy
1 lot of 25Nov-CA@400 by paying 24Rs. &
1 lot of 25Nov-PA@400 by paying 6 Rs
And Lets say on 25 Nov... Tata Motor is trading at
1) 390
2) 394
3) 400
4) 410
Then in all 4 cases, which of my order will get executed ? which options will expire without execution.
Well, i understand for the same example if i buy
25Nov-CA@440 at 4.30 Rs today...
1) If on 25Nov, it is trading at 430
------------- I know, this contract will expire without execution & i will loose 4.30 Rs / share, for 1 lot of 815 Shares.
2) If on 25Nov, it is trading at 450
------------- I will make profit of 10-4.30 = 5.70 Rs per share for 1 lot (815 shares).
Thanks in advance for your reply.
Vijay.