Option trading profit and loss
Puts can be used also to limit the writer's portfolio risk and may be part of an option spread. I know the point of unlimited option trading profit and loss and limited profit, but why would anybody want to sell a put option as it has limited reward i. Hence before we get deeper into options, it is important to have a strong foundation on these four variants of options.
Saravana — you have summarized it quite well. July 9, at 8: I am explaining this, please let me know what loopholes are in it. There is a difference between writing options and squaring off…you need to be aware of this.
There are no additional charges that you pay if you hold the sold option trading profit and loss to expiry. Well, with this I hope you have developed a strong foundation on how a Call and Put option behaves. April 1, at 7: Thanks Karthik for reply, but i am still not clear with point number 1.
August 28, at 7: September 26, at 1: If the volatility of the stock has increased, then so would the premiums. If I sell my Call option before expiration is the profit or loss strictly the difference between the Ask Price I paid and the Bid Price that I received option trading profit and loss the commission cost or is it a combination of the change in the stock price between buying and selling plus what remains of the value of the option?
July 14, at 5: Now what happens here B1 just transfers his position to another person, say B2 who is interested to take position from B1. Irrespective of how the spot value changes, the fact that I have paid Rs.
October 28, at 2: Extremely thankful to you for sharing. Check the brokerage calculator to figure out the profitability — https: These details are marked in the blue box. Thank you so much for your articles sir.
Is there a difference if I am closing my position before expiry or excersize it at expiry? Can you please let me know few great tools free or cheaper ones available in the market to do: Crudely put, some Option Greeks tends to increase the premium, while some try to reduce the premium.