Comment on Policy on settlement of compulsory delivery derivative contracts — Update Oct 2019
commented on
25 Mar 2020, 03:04 PM
I have shorted 1 lot (500 Qty.) of HDFCBANK 820 PE @ the premium of INR 45. I understand that I need to take delivery of if option ends up in ITM or CTM ( if excercised) provided that I have sufficient balance.
Please reply me for below situation considering that counter party exercised its rights.
1) HDFCBANK settlement price is 840. What will be my profit / loss. Is it Premium 45 – Intrinsic value 20(840-820) = 25 * 500 (1 Lot) = INR 12,500/- plus I will be having HDFCBANK 500 Qty. at the price of INR 820.
2) HDFCBANK settlement price is 780. What will be my profit/loss. Is it Premium 45 – Intrinsic value 40(820-780) = 5*500 = INR 2500/- plus I will be having HDFCBANK 500 Qty. at the price of 820.
Tomorrow is expiry day hence I will be very thankful if you answer this query at the earliest possible.