01 December 2009
Hi My Question is pertaining to Indian Stock Market. I have not Invested in stock Market,all i have is only theoretical Knowledge and no Practical Knowledge.
The Question: I buy a Call option of a Stock (say Reliance) having a Strike Price of Rs 2901.i bought this option when the Option premium was Rs 150/ Option Contract.
I Hold this Option till Exercise date. The option Premium keeps fluctuating Stock Price ( today its Rs 150 tom it is Rs 153 & so on. On the Exercise date assuming Reliance Stock Price is say Rs 2500/share and option Premium is Rs 163. I will not exercise the option and will lapse it. On Lapsing i that i loose is Option premium.
What is the Option Premium i Loose Is it Rs 150 or Rs 163 ?
02 December 2009
Hi you lose only 150/- as thats the premium you pay for buying the call option. Its not of concern on how the premium moves after you buy the call.
CAclubindia
