Why trade Options if volume is so low

[SGM]

Brokerage Is Being Charged Only On The Premium.

This Has BeenIn Effect Ever Since The Notification Was Issued By NSE

SavantGarde

Yes Sir,

Works well for ppl still with % brokerage but no change for ppl (like me) paying flat brokerage per contract, no complaints either as it works out to be really low.

not a relief, but a necessity. presently even if you get Rs 800 by writing a call, you pay 80-90 as STT - more than 10%.

From 1st April the stt will be applicable only on premium amount and not on SP+Premium, as is being done currently, unless it was a fools day promise by FM

Savant sir plz confirm.

Regards
Sanjay

 

[jsargunam]

Hello..I am sargunam, new to this forum. I want to know the utility of and how to use the forum for mutual advantage of members.

 

[beginner_av]

Yes Sir,
From 1st April the stt will be applicable only on premium amount and not on SP+Premium, as is being done currently, unless it was a fools day promise by FM

Savant sir plz confirm.

Regards
Sanjay

Sanjay Sir, It is confirmed, but I am not sure of the date yet.

 

[uasish]

jsargunam,

A warm Welcome to the Forum,you have an interesting query,any suggestion by you.

Asish

 

[uasish]

Can you guy explain how a Credit Spread is to be done.

 

[pasha]

An options strategy where a high price option is sold and a low price option is bought on the same underlying stock.
An example is buying a Apr 50 call on xyz for Rs.2, and selling a Apr 45 call on xyz for Rs.3 assuming xyz is at 40. The net credit received is Rs.1. The max risk is the difference between the sell and buy.
You must have an opinion on where the stock is going and this is the main factor in determining profitability. Also beware of volatility skews.

 

[beginner_av]

similarly it can be done with puts too.

 

[uasish]

An options strategy where a high price option is sold and a low price option is bought on the same underlying stock.
An example is buying a Apr 50 call on xyz for Rs.2, and selling a Apr 45 call on xyz for Rs.3 assuming xyz is at 40. The net credit received is Rs.1. The max risk is the difference between the sell and buy.
You must have an opinion on where the stock is going and this is the main factor in determining profitability. Also beware of volatility skews.

OK got it thks.

 

[gatul]

1.
STT will be charged on premium only from 1 June 2008

2.
Where can i get the book "Option Volatility & Pricing". Its is very expensive at Rs 2500. Is there a cheaper version available?

gatul

 

[AakashM]

I've taken the printout of its ebook. Its about 500 pages, so it cost me about Rs. 500.