Tuesday, August 12, 2014
Introduction to Options
Buy calls
Means : Buy a call first and then sell , hoping the Index/Stock will go up.
Margin Required = Premium paid
Profit Potential = Unlimited (Change in Premium = Change in Intrinsic Value + Change in Time Value)
Buy Puts
Means : Sell a call first and then Buy , hoping the Index/Stock will go down.
Max Loss = Limited to Premium paid
Margin Required = Premium paid
Profit Potential = Unlimited (Change in Premium = Change in Intrinsic Value + Change in Time Value)
Margin Required = Premium paid
Profit Potential = Unlimited (Change in Premium = Change in Intrinsic Value + Change in Time Value)
Sell Puts
Means : Sell a call first and then Buy , hoping the Index/Stock will go up.
RISK = Margin Maintained (Unlimited Risk)
Margin Required = 1 Lot = 25000 as
Profit Potential = Upto Premium Paid By Buyer.
Margin Required = 1 Lot = 25000 as
Profit Potential = Upto Premium Paid By Buyer.
Sell Calls / Short Calls / Write Calls
Means : Sell a call first and then Buy , hoping the Index/Stock will go down.
RISK = Margin Maintained (Unlimited Risk)
Margin Required = 1 Lot = 25000 as
Profit Potential = Upto Premium Paid By Buyer.
Margin Required = 1 Lot = 25000 as
Profit Potential = Upto Premium Paid By Buyer.
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