Help is needed for Call option

Hi guys
I want to try call option for the first time. I’ve gone through many tutorials available on youtube but still have confusion. Hope u guys will help me with that.

Can I derive the below statement from the chart?
I want to purchase DHFL call option for April which expires I’m 26th. Its current cost is 540 rs but im getting a lot of 1500 shares only by paying 21.75 rs.
If tomorrow the share price of DHFL rises up to 545 rs then I’ll get a profit of 7500 rs (5*1500). In a worst case, I’ll lose only 21.75 rs.
Am I right?

Its not not Rs 21.75 , you have to multiply this call premium price in to lot size , that is 21.75 X 1500 = Rs 32625.00

2 Likes

Thanks for clearing my doubt.
It means if the price of DHFL reaches to 545, still I have to bear loss of 16.75 in each share? ( paid 21.75 rs and got return of only 5 rs per share) and getting a profit from this deal , the share price of DHFL should have price surge of 21.75 rs, at least?
Am I correct?
Could you plz tell me the difference between Ask Qt/Ask price and Bid Qt/Bid price?

You have to consider whole Rs 21.75 X 1500 + Brokerage + tax , as loss , until DHFL crosses above 540 or 545 . and its always '“probability” Options works/depends on many factors , lets say bit complex, Don’t buy options till you understand it properly , and

is same as in normal , Sell Qt/ Sell Price & Buy Qt/ Buy Price

Thanks

I wold like to suggest, if you can take little loss , lets say Rs 500 to Rs 800 , with tax + brokerages to know about options , you can try / look at USDINR currency options

all the best for journey.

I’ve searched tutorials but couldn’t get much about call and put options.
I would be thankful if anyone can suggest me a good tutorial which clears doubts when to sell/ buy the call/put options and when to buy/sell call and put option together.

I have a doubt, If I sell an option and before its expiry I want to book profit then how to book the profit (can I book profit by buying the same amount of option). Is it possible?Because in tutorial they said only buyer has right to call off the deal, seller can’t.

You can square off any position buy or sell anytime you like at LTP.
Buyer has option, Writer has compulsion is all theory which is helpful only at expiry.

In India we have European Options. That is what the E stands for in CE and PE. And all options are cash settled. So you can just exit at any point in time from your position by squaring it off.

The tutorials you are reading is about the analogy and risk you are taking while being a buyer or seller/writer of the option. But it can be settled at any time before expiry.

current price is 2075. If I sell 1000 Qt of May call option @2400 I’ll 7000 rs as premium. Am I right?