Showing posts with label calculation of profit in option. Show all posts
Showing posts with label calculation of profit in option. Show all posts

Wednesday 2 July 2014

CALCULATION OF P & L IN OPTION

While it comes to calculation, there is thing we have to learn  how to calculate profits/losses are calculate. 
Let’s go with an example, nifty to understand better how profits and losses are calculated in options trading. The lot size of nifty is 50 shares in number irrespective of call or put. The profit/loss does not depend on the type of call (nifty call option or nifty put option), expiry or strike. It directly depends only on premium which trader selects while purchasing the option.