Hello I am new in market.
I by mistake bought banknifty call of 21700 @Rs2100 24 sept.expiry.
Question are.
If Bank Nifty stays below 21700, you will lose the entire premium paid ie. 2100 and your loss will be 52,500 (2100 * 25)
If Bank Nifty stays above 21700 your Profit/Loss depends on the intrinsic value of the Option (How much In The Money Option is), for you to make a profit on this option Bank Nifty has to move above 23800 (This is your breakeven point: Strike Price 21700 + 2100 Premium Paid), If Bank Nifty stays below 23800 you will be making a loss.
Would suggest you use Sensibull Strategy Builder to easily measure pay-off at different expires.
Maximum loss is 52,500. Maximum Profit can be unlimited If Bank Nifty moves above 23800.
On expiry, the exchange will settle the Option, and depending on your Profit/Loss, the amount will be credited to / debited from your account.
Give Options Theory module on Varsity a read, you will get to understand even more about Options.
Thanks slot brother for enlightening me. Hope it stays above 23800/-.btw what are the chances of this going above 23800/-according to you at expiry.
That’s stupid to ask somebody to predict. Toss a coin and find yourself.
@Qscxae
Respected Sir, Have you considered giving away money in charity! If not then this is the time. Please donate your money to poor traders like us. This has multiple benefits over gambling away your money in trading options.
Many people are using this scheme. Our main attraction is their is utterly no need at all to take efforts to study, learn, practice etc. Final result remains same - All your money in my pocket
P.S.
After availing our scheme some traders were so eager and restless to encash their blessing vouchers and taste the fruits of promised afterlife in heaven that they decided to cut short their stay in this world and took shortcut to reach heavens.
That’s very right actually.
Please teke me as a noob.
My question was do we ever see 2100 as a premium for any banknifty call or not. And if banknifty crosses 24000 will I be seeing such premium?
As of now what I see is 2000 as premium but no buyer is available above 221rs.
Thanks for help once again
Hello maddy_des don’t be sarcastic.
I am new to market and I was scrolling through and saw this call at 0rs and while checking I accidentally pressed buy and my platform didn’t have me the chance to verify and order got submitted and executed within blink of a second. it was showing 0 in premium price and when account got debited I realized what actually happened.
Since then I was looking where I can get the answer luckily I got to see This platform.
I literally do not know how to get out of this thus seeking your help that upto what extent money can be recovered and by any chance I can make profit on this even little.
If you still choose to be sarcastic I don’t mind till it helps.
That’s sad. You’re stuck. Add some more capital and sell August expiry at 22000 CE strike. You will find some liquidity. That’s called hedging your loss will be minimal…
Thank you for reply.
I have 2 questions.
Yesterday bank nifty closed at 228000 and when I look at 23july 19800 call it’s premium is shown as 1833.80. Please assume as if I bought it few weeks ago for 2100 premium and if I bank nifty on expiry is 22800 and we do not see any buyer above 1833.80 and premium shown is 1833.80 only TN how this thing will be settled and what will be my profit or loss if I don’t square it off.
Which call of22000 August should I sell 22000 27 aug is at1489
20 aug is at 1312
13 aug is at 1127
06 aug is at 1150.
Choose where you see liquidity.
Can anyone answer this.
Yesterday bank nifty closed at 228000 and when I look at 23july 19800 call it’s premium is shown as 1833.80. Please assume as if I bought it few weeks ago for 2100 premium and if I bank nifty on expiry is 22800 and we do not see any buyer above 1833.80 and premium shown is 1833.80 only TN how this thing will be settled and what will be my profit or loss if I don’t square it off.
Exchange will settle this Option at Intrinsic Value. So if Bank Nifty closes on Expiry at 22800, Intrinsic Value of 19800 Call will be 3000 (22800 - 19800), Coming to your Profit/Loss, since you bought this at 2100 and it is settled at 3000 you will be in profit of 18000 (- brokerage and other taxes) additional to this charges there will also be STT charged at 0.125% on Intrinsic Value of the option.
Thank you shubham for clear explanation now I have crystal clear picture in mind that banknifty must stay on or above 23801 on expiry for me to be in profit.
And if it stays below like 23600 calculation will be 23600-21700=1900
And what I’ll get if exchange settles is 1900*25=47500( -brokrage and taxes).
Please do respond that my above statement is correct or not.
Hello guys. I would like to inform you by god’s grace I am out of this trade in profit.
Would like to thank Mr shubham here specially for sharing valuable Information about option buying and different events that can take place so clearly.
Thank you!
Here I would like to ask few more questions.
On above trade if I was a seller.
Below 21700, your Short position would’ve expired worthless and you would’ve get to keep all the premium you received.
For Option Seller, profit is limited to premium received while losses can be undefined.
For more detailed information, I’d suggest you read Options Theory module on Varsity.