Interested to Buy Any Domain ? << Click Here >> for more details...
what is call option
- 3 Answers
- 7054 Views
- Kotak, I also Faced
- E-Mail Answers
Answers were Sorted based on User's Feedback
Answer / giri
A call option gives the right to the buyer of an option to
buy some assets,shares,etc. at a strike price on a fixed
date. The buyer of the option pays some premium to the
seller/writer of the option. Options are exchange traded
contract, so there is no default risk.
The buyer makes profit from the option when the price of
the underlying assets increase in the market and makes
losses which is fixed that is the premium amount what he
has paid at the time of the contract.
How he makes profit?
Suppose the underlying asset is the share of infosys and
the current market price of the share is Rs. 1000 and You
have entered into the contract with another person that you
will buy a call option with a strike price of 1050 and you
will pay the premium of 20 after one month.
After one month if the price of the share is 1100, then you
will make a profit because you will buy the share from that
person at Rs.1050 and you will pay the premium of Rs.20 and
sell those share at Rs.1100 in the market.
So, Total profit for you will be 1100-1050-20=30
| Is This Answer Correct ? | 6 Yes | 1 No |
Answer / kavukuntla vinutha
an option contract is called a "call option",if the writer
gives the right to purchase from him yhe under lying assest.
| Is This Answer Correct ? | 2 Yes | 2 No |
Answer / bushi
call option is the option that gives its holder the right to
buy a certain underlying asset at some fixed price called
strike/exercise price determine by the maker of the option
and at some specified date called expiration or maturity date.
The option holder have to pay an up-front price to buy the
option called Premium.
Important thing is that the option holder not necessarily
have to exercise the option, Its the choice of the option
holder as to whether to exercise the option or not depending
on the market situation.However if the option holder do not
exercise it, he would only be having a net loss equal to the
amount of premium.
| Is This Answer Correct ? | 0 Yes | 0 No |
What Do You Understand By Total Income?
Tell something about E- Choupal?
What does planning and forecasting mean?
How do SEZs help in the economic development?
What Is Debt-to-income Ratio?
What is Under Subscription?
0 Answers Joint Stock Company,
Where is the UNICEF headquarters located?
What is the Bank of England base rate/Fed funds rate as of this morning?
How will you differentiate between Balance of Payment and Balance of Trade?
Dear sir plz give d ncfm dp module questions websites otherthan nse
What is Mortgage Loan Modification?
Why development of rural area is important (when told the function of NABARD)?
-
Business Administration (517) - Marketing Sales (1279)
- Banking Finance (3209)
- Human Resources (747)
- Personnel Management (68)
- Hotel Management (29)
- Industrial Management (113)
- Infrastructure Management (14)
- IT Management (97)
- Supply Chain Management (16)
- Operations Management (39)
- Funding (79)
- Insurance (494)
- Waste Management (1)
- Labor Management (48)
- Non Technical (73)
- Business Management AllOther (546)
