I am a newbie in Options trading, I just thought a way of doing a trade in options, but I am not sure whether it is correct or not, as I have done only in cash market so for and in options its lots more different.
Lets say an example of trading...
Current Nifty is on 4600 (14th Aug. 2009) and I buy in this way..
Expire Date: 27 Aug. 2009
Nifty 4400 Put - 1 Lot (with premium of Rs.60 = Rs.3000 approximately)
Nifty 4800 Call - 1 Lot (with premium of Rs.60 = Rs.3000 approximately)
and now the scenarios in this way on 25th Aug. 2009
1. If, Nifty surges to 4900 on this date, what will be the positions of this both Put and Call lots?
2. On other side if, Nifty crashes to 4300 on this date, what will be the positions of this both Put and Call lots?
3. If, Nifty has volatile and stays on 4600 on this date, what will be the positions of this both Put and Call lots?
4. What will my position if I didn't squareoff both Put and Call on 27th Aug. 2009 if Nifty is on 4300, 4600, 4900, ?
What will be my Total Profit/Loss on 25th Aug. 2009 when I plan to squareoff?
Since, I am newbie in Options, please correct me, if any mistake, Thanks.
Lets say an example of trading...
Current Nifty is on 4600 (14th Aug. 2009) and I buy in this way..
Expire Date: 27 Aug. 2009
Nifty 4400 Put - 1 Lot (with premium of Rs.60 = Rs.3000 approximately)
Nifty 4800 Call - 1 Lot (with premium of Rs.60 = Rs.3000 approximately)
and now the scenarios in this way on 25th Aug. 2009
1. If, Nifty surges to 4900 on this date, what will be the positions of this both Put and Call lots?
2. On other side if, Nifty crashes to 4300 on this date, what will be the positions of this both Put and Call lots?
3. If, Nifty has volatile and stays on 4600 on this date, what will be the positions of this both Put and Call lots?
4. What will my position if I didn't squareoff both Put and Call on 27th Aug. 2009 if Nifty is on 4300, 4600, 4900, ?
What will be my Total Profit/Loss on 25th Aug. 2009 when I plan to squareoff?
Since, I am newbie in Options, please correct me, if any mistake, Thanks.