If I write an option for e.g. of nifty at a strike price of 15200. The option calculator shows i’ll get a premium of around rs 19000. Now if the strike price rises to rs. 15400 & I feel that I shouldn’t be in the position anymore & want to exit. Is the premium of 19k before expiry of the contract still with me or is there a different calculation for it?
When you exit your position, the difference between the price at which you shorted the option at and square-off your position at will be your P&L.
Eg. You took short possession in 15200 CE at 100, and square-off at 200 then you’ll be making loss of 100 * Lot Size.
Similarly, you took short possession in 15200 CE at 100, and square-off at 50 then you’ll be making profit of 50 * Lot Size.
For thorough information on Options, would suggest you read this module on Varsity;