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Future Contract and Call Option
Future Contract and Call Option
Submitted To
Solution:
Bought a future contracts Axis Bank
Buying price of Axis Bank=1,980
Expiry price of Axis Bank=1,900
Lot size is 100 shares
Profit/Loss=Expiry price-Buying price*Lot size
Loss= (1,900-1,980) *100
Loss= -80*100
Loss= -8,000
Mr. Amir incurred a loss of 8,000 on Axis Bank
Future Contract.
Meaning:
CALL OPTION
Call Option
Writer(Seller)
Receives premium.
Obligation to sell
shares if Exercised.
Profit from falling prices
or remaining neutral.
Potentially unlimited
losses, limited gain.
c) 900
Solution:
a) 1000 100 profit 100
b) 700 no profit no loss
c) 900 profit 100