Options Basics & Advanced by NSE
- Thread starter stocksplacement
- Start date
Seems you bought a PUT for Oct series... do share how you plan to trade it... your Target , your SL etc.Thanks.
Frankly, I know the basics but never traded Options...
Frankly, I know the basics but never traded Options...
rkkarnani,
Yes, I have purchased a NIFTY 50 Put expiry October, 2010 at a premium of 95.00, my target is 5600 by October, 2010. This is my first buying in option so i will consider this amount of Rs.4750/- as total loss as of now but am optimistic. Will be a pracitical learning lesson for me to understand how Option works in real time.
I dont know what you mean by stop loss, can you explain. There was a stoploss colum but do not know for what it is.
You are yet to mention the strike price for your option trade. I assumed that to be 5800 PE oct. and suggested you to book the profit as 5800 oct put was then trading at 108.00. If my assumption of 5800put is correct, then you would have got a profit of 108-95=13x50=Rs.650 (without accounting for brokerage and charges).
In such trades, it is always better to exit on the same day itself without carrying any position. I suggest that you devote some more time to go through the various threads in this portal on option trading to understand the basics. Especially, there is a concept called "time decay" in option trading which needs to be understood by you first. If you ignore that and the trend moves against you, you will end up burning your fingers.
My sincere advise to you is to study the discussions in the various option threads here and understand the concepts involved. Then try paper trading(imaginary trading) for some time till you get used to the various tunes of the market. Once you are confident with all the acquired knowledge, then you can use real money to enter the trade.
In such trades, it is always better to exit on the same day itself without carrying any position. I suggest that you devote some more time to go through the various threads in this portal on option trading to understand the basics. Especially, there is a concept called "time decay" in option trading which needs to be understood by you first. If you ignore that and the trend moves against you, you will end up burning your fingers.
My sincere advise to you is to study the discussions in the various option threads here and understand the concepts involved. Then try paper trading(imaginary trading) for some time till you get used to the various tunes of the market. Once you are confident with all the acquired knowledge, then you can use real money to enter the trade.
mayavi99,
Thanks, your assumption is correct, I buy the strike price at 5800 PE Oct PUT, you mean i am in profit is it what you are saying? but what about the premium of 4750 that will have to be paid.
Yes, i will have to learn about time decay, my mistake learnt only the basic in which "time decay" not come across, thanks very much, i will be sell it tomorrow since i was not able to sell it, as i am expecting that there will be profit booking tomorrow.
Thanks, your assumption is correct, I buy the strike price at 5800 PE Oct PUT, you mean i am in profit is it what you are saying? but what about the premium of 4750 that will have to be paid.
Yes, i will have to learn about time decay, my mistake learnt only the basic in which "time decay" not come across, thanks very much, i will be sell it tomorrow since i was not able to sell it, as i am expecting that there will be profit booking tomorrow.
Whatever you are paying to buy one lot is the premium and you are getting it back if you sell that one lot at a higher price(premium) along with some profit. Is that now clear?
In the instant case, your premium of Rs. 95 is back along with a profit of Rs.13, if you had sold it at 108. Since one lot of nifty is 50 units, your profit would have been 13x50=650. Subsequently it has closed for the day @ 102.95. I find from the NSE data, it has touched even 117 at one point of time during the day. OMG!, you could have even ended up with a 20% gain on a single day.
Futures & options are serious trading games. If you are not very sure about the basics, you may end up in serious loss. Please devote time to study the option threads here and grasp the contents.
In the instant case, your premium of Rs. 95 is back along with a profit of Rs.13, if you had sold it at 108. Since one lot of nifty is 50 units, your profit would have been 13x50=650. Subsequently it has closed for the day @ 102.95. I find from the NSE data, it has touched even 117 at one point of time during the day. OMG!, you could have even ended up with a 20% gain on a single day.
Futures & options are serious trading games. If you are not very sure about the basics, you may end up in serious loss. Please devote time to study the option threads here and grasp the contents.
mayavi99,
As mentioned, I had purchased NIFTY 50 October Put 5800 at a premium of Rs.95.00, now the premium is 88.50 and the NIFTY 50 as on 17th September, closing is 5884. Will MTM be debited to my account on 20th September, 2010. I dont see any debit to my account. Though the broker has debited Rs.4,750.00 +brokerage on the date of buying, the have not debited any money for the 17th September, 2010 closing. Please advise.
As mentioned, I had purchased NIFTY 50 October Put 5800 at a premium of Rs.95.00, now the premium is 88.50 and the NIFTY 50 as on 17th September, closing is 5884. Will MTM be debited to my account on 20th September, 2010. I dont see any debit to my account. Though the broker has debited Rs.4,750.00 +brokerage on the date of buying, the have not debited any money for the 17th September, 2010 closing. Please advise.
| Thread starter | Similar threads | Forum | Replies | Date |
|---|---|---|---|---|
| S | Basics of Options in Hindi and English | Options | 2 | |
|
Trade Basics in USDINR Currency Futures/Options | Beginners Guide | 5 | |
|
Options Basics Self Study Notes | Options | 3 | |
| S | How to trade options - basics revisited | Options | 1 | |
| N | Basics of Futures and Options | Beginners Guide | 3 |