In India, options are cash-settled and not settled via actual delivery of the underlying. The profit of the Seller of put options is limited to the premium received by them.
Stock price of A falls to zero, you make a profit of Rs.98 (Strike Price less Premium Paid, i.e. Theoretically the buyer of the Put option can make a profit limited to the spot price of the underlying less Premium paid, say for example, A Ltd is trading for Rs.105, You buy a Put contract of A with strike price 100, paying Rs.2 as premium. Put option writing also requires margin to be paid by the option writer. Sellers of a put option have an obligation to TAKE DELIVERY of the underlying at a pre-determined price. Buyers of put options expect the price of the underlying to depreciate. The buyer of a Put option has a RIGHT to SELL the underlying at a pre-determined price.
Theoretically, Buyers of Call Options can make unlimited profits as stocks can rise to any level, while call option writers make profit limited to the premium received by them. Sellers of a call option have an obligation to deliver the underlying and are subject to unlimited risk due to which option selling/writing attracts margin. Buyers of call options expect the price of the underlying to appreciate. Theoretically, the buyer of a Call option has a RIGHT to BUY the underlying at a pre-determined price.
call option or put option and accordingly evaluate the output. This can also be used to simulate the outcomes of prices of the options in case of change in factors impacting the prices of call options and put options such as changes in volatility or interest rates.Ī Trader should select the underlying, market price and strike price, transaction and expiry date, rate of interest, implied volatility and the type of option i.e. This tool can be used by traders while trading index options (Nifty options) or stock options. With the SAMCO Option Fair Value Calculator calculate the fair value of call options and put options. Calculate Fair Values of Call options and Put options for Nifty Options and a wide range of other Index and Stock options listed on the National Stock Exchange in India
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