Square off and premium consideration

[Ashish_Sinha1]

Hi,
Suppose I sold PE for 15600 Aug expiry and got premium of say 165… so 165*50 comes as premium… as I see this gets credited in funds balance…

Now if market goes up and also due to time decay premium value for this strike price gets lower in next few days… let’s after a week premium gets to 100 rupees and I then square of this position…

So how does the calculation works in that case :
My profit will be (165-100)*50?

Will the premium which was credited earlier be debited as well from balance?

Can you please clarify?

[Kalpesh]

@Ashish_Sinha1

So how does the calculation works in that case :
My profit will be (165-100)*50?

Your calculation is correct. ,

[Ashish_Sinha1]

And what will happen to premium of 8250 which was credited earlier? Will that be debited as well ?

[Ashish_Sinha1]

I got my query clarified from below link. Thank you

Intraday option selling

first of all you need approx. 15000 rs to hold overnight and approx. 7500 to trade intraday in MIS product which will get square off at 3: 15 pm and second if you write 8350 call at 36 rs , you will get 25*36=900 bucks and yes premium will be credited into your account immediately and your profit or loss will depend upon rising or falling of premium , if premium rise by 4 bucks , your loss will be 100 , if fallen by 4 bucks profit will be 100 , as you are buying intraday using MIS product , you…

[MightyBulls]

Your profits will be = (165-100)*50 = 3250
So, 5000 will be debited from your account because you need to buy back contracts at 100