CALL options in Derivatives
From last few days I have being studying about futures and options.
Today I was having sometime to apply my book knowledge to practice.
I have studied that you can buy/sell CALL or PUT options.
I was studying that you can invest a LITTLE and can gain a lot from F&O.
Now today discovered what is the value of that LITTLE.
Say today I wanted to buy CALL option for JUN’10 series.
SUZLON-60@3.5 (lot size 3000), meaning if I want to buy a call option for suzlon june series
I have to pay a LITTLE of 3.5 *3000=10500, currently SUZLON in trading @ 59.50 in cash market.
It means I have to pay a cost of 6% (LITTLE) of the current stock price.
It’s a quite expensive deal.
As this Rs 10500 is something which will never come back to you.
But, in case SUZLON crosses 60 then I can make some money say if it will go to 65 I will make 5*3000 =Rs15000.
Profit of Rs 4500, only in case if rises by almost 10% not bad.
So try your luck but be very careful.
