Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

Easy Office

LCI Learning

Calculation of turnover in option trading

Priyanka Gupta (3 Points)

23 July 2024

how to calculate turnover in option trading in case of loss

Reply
Follow
Share

1 Replies

Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (3443 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

Upgrade to CAclubindia Pro. Subscribe Now!

Join CCI Pro

Recent Topics

More recent discussions | Post

Related Threads

Popular Discussion

Start a New Discussion

CCI Pro

Live Budget News and Updates

Trending Online Classes

3 Days Certification Course on Tax Audit Under Income Tax Act 1961

CA Pratibha Goyal

Enroll Now

05 August 2024
Live class on PF & ESI Enrollment & Returns Filing(with recording)

Mr.Balamurugan Ranganathan

Enroll Now

26 July 2024
Live Course on Practical GST Filing with Expert Legal Insights

Sachin Jain

Enroll Now

26 July 2023

view all classess

Let's Talk Money: You've Worked Hard for It, Now Make It Work for You

Click here for more bestsellers

Subscribe to the latest topics :

Search Forum:

Forum Home

Popular Threads

Recent Posts

Unreplied Threads

Settings