For Example If I buy a call of 5200 at 80 Rs. I am confused with 3 aspects Margin Block, Actual Loss/Profit, Premium Gain. ![Confused :confused: :confused:](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
My questions are:-
1. I have read in forums that when I buy or sell (I don't know) a call with put I gain premium. what is that premium gain and how does it affect profitability ?
2. In the above example if the call goes in my favour 10 points what is my actual profit loss when i close call. please elaborate in detail.
3. In above case my margin requirement is 4000 Rs. If naked call goes against me for 10 point and i close whether my total loss will be 4000 Rs and deducted from my account or 500 Rs (50Lot Sizex10 Point Loss) ?![Confused :confused: :confused:](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
4. What is the premium gain concept in case of covered call and how does it help me minimize losses in the above case. You can take an example of put along with the above naked call.
Thanks in Advance. Pros please help me. I am still not understanding it clearly.![Frown :( :(](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
My questions are:-
1. I have read in forums that when I buy or sell (I don't know) a call with put I gain premium. what is that premium gain and how does it affect profitability ?
2. In the above example if the call goes in my favour 10 points what is my actual profit loss when i close call. please elaborate in detail.
3. In above case my margin requirement is 4000 Rs. If naked call goes against me for 10 point and i close whether my total loss will be 4000 Rs and deducted from my account or 500 Rs (50Lot Sizex10 Point Loss) ?
4. What is the premium gain concept in case of covered call and how does it help me minimize losses in the above case. You can take an example of put along with the above naked call.
Thanks in Advance. Pros please help me. I am still not understanding it clearly.
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