Calculation of turnover in option trading
Priyanka Gupta (3 Points)
23 July 2024
how to calculate turnover in option trading in case of loss
1 Replies
Rama chary Rachakonda
(Master in Accounts & high court Advocate)
(8403 Points)
Replied 23 July 2024
- Determine the total premium received: Add up the total premium received from selling options,
- Determine the total premium paid: Add up the total premium paid for buying options.
- Calculate the net premium: Subtract the total premium paid from the total premium received.
- Add the net premium to the notional value of the options traded: Multiply the number of contracts by the strike price and add the net premium.
- Consider the loss: If the net result is a loss, use the absolute value of the loss as the turnover.
- Formula: Turnover = (Total premium received -total premium paid)+ (Notional value of options traded)
- Example:
- Total premium received: Rs.1,00,000
- Total premium paid : Rs.1,20,000
- Notional value of options traded: Rs.5,00,000(10 contracts x Rs.50,000 strike price)
- Net Premium = Rs.20,000(Rs.1,00,000-Rs.1,20,000)
- Turnover: Rs.5,20,000 (Rs.20,000) + Rs.5,00,000
Recent Topics
- Cash transfer treatment between spouse under new r
- APPLICABILITY OF GST ON PULSES PREPACKED AND LABEL
- HSN Code for Keychain (Plastic+metal)
- Society and development, Highlighted by a term fin
- REGISTER ACCOUNT IN INCOME TAX PORTAL - NRI &
- LTCG ON PROPERTY SOLD IN PARTS
- Which GST to charge(Whether exempt or chargeable)
- Impact on project cost
- Register as representative for deceased
- OLD SILVER PURCHASES
Related Threads
Trending Online Classes
-
Live Course on EPF & ESI Act - Mastercourse(With Govt Certificate)
Mr.Balamurugan Ranganathan16 June 2025
CAclubindia
