Option profit calculator nse
Identify the trend then decide on long or short straddle. Calculate the call and put option delta independently and make straddle delta neutral. Straddle and strangle are the most common option strategy and known to most of the option traders. These strategies are simple and rewarding too. It is very easy to estimate the payoff of the straddle and strangle.
However, to my knowledge most of the traders used to get disappointed with the performance of these strategy. The question comes whether the strategy is wrong or its implementation is wrong. In the following section I will discuss the implementation of these strategy.
What is a straddle option strategy? Straddle is option combination where in the trader choose to buy or sell a combination of one call option and put option of same strike. Based on the buy and sell behaviour of call and put option straddle are known as long straddle and short straddle. Say nifty is at and trader choose to buy call option of January expiry at Rs50 and put option of January expiry at Rs Short straddle sells a call option and put of option of same strike, same underlying and same expiry.
Say nifty is at and trader choose to sell call option of January expiry at Rs50 and put option of January expiry at Rs Profit and loss in long straddle Theoretically with respect to above example long straddle make no profit no loss option profit calculator nse. Any raise option profit calculator nse or fall below trader make the profit. If nifty price neither move above nor fall below then the trader makes the loss. Profit and loss in short straddle Theoretically with respect to option profit calculator nse example short straddle make no profit no loss i.
Any raise above or fall below trader make the loss If nifty price neither move above nor fall below then the trader makes the profit from the time value decay. I have used the term theoretically to explain the profit and loss why so? While projecting this profit and loss I have considered the time value component of the options are zero and the underlying asset expires at the price point as expected by me. In practical context the option behaves in a different way. For example, time value never used to die down to zero even one hour option profit calculator nse the expiry.
Underlying asset price has all freedom to move to any price range. Hence theoretical estimate never works in practical situation. Before you decide whether to take a long straddle or short straddle you need to understand the current weekly trend. As 1SD trend forecast proved to be option profit calculator nse best choice I will use the same for option profit calculator nse decision process.
On 28th January at 11 a. The call option at implied volatility IV Based on the above information. The 1SD nifty trend for one week is as given below. Maximum points of price move an uptrend or down trend can reward you is Based on this information and the premium information of the call option and put option together point i. However, a short straddle may be good choice at option profit calculator nse point of time.
But in case of a short straddle trader need to remember any price move above or below within one week of holding will result the raise in volatility and result loss and the trade need to be closed in loss in this situation. We have a deviation in this approach. Since the call option and put option has different IV it will not have the delta derived by taking the reference of a common implied volatility. Hence look the delta of two options independently based on their respective IV.
In the above example call option delta with reference to implied volatility Hence while making the straddle delta neutral in bigger number of lots. Hence in order to make the long straddle delta neutral you need to buy This calculation I have done based on numbers hence divide with the lot size to get the exact lot size.
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Intraday GAV Technique h. Day Trading Made Easy i. Wise Stock Investment Tricks j. Currency Trading Techniques l. Commodity Trading Techniques m. Day trade using gann method b. Day trade using fibonacci method c. Day trade using elliot wave d. Day trade using technical e. Introduction to decoupling method Must Read a. My experiment on gann method b. My experiment on fibonacci method c.
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Upon expiry, the contracts are always settled with the spot price. The downside to letting in-the-money options expire is the higher rate of STT that one has to pay. It has been explained in detail here: In option profit calculator nse case, if you have Banknifty PE and Banknifty closes atthen your option will be option profit calculator nse at Note ; Options are considered exercised if you hold buy positions in options till the end of expiry till after 3.
STT on option trades done on the exchange is charged at 0. STT on Buy option positions that get exercised is 0. Squaring off before 3. Assuming that the option price is at a discount option profit calculator nse its intrinsic value and is trading at Rs. Allowing option to exercise: Option exercise price is Rs.
Here, even the strike price is added to the option premium while calculation STT, so. As observed, even though your option will be exercised at Intrinsic Value, one must square off the option to maintain a higher profit and avoid a higher STT. Hello Bharat W, Your explanation is correct except for 1 thing. So, which closing price is taken option profit calculator nse account to calculate settlement amount? Is it the weighted average of the last 30 minutes or the close of the last 1 minute candle?
Can this be please indicated? The same as monthly options, settlement happen based on banknifty spot closing price for that day.
Option expiry price calculation General. It is always last 30 mins weighted avg price.
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