Calculation of turnover from trading in options
This query is : Resolved
Anil Kumar
(Querist)
13 August 2016
Respected Experts,
Please review my calculation of turnover from option trades for the purpose of applying provisions of sections 44AB and 44AD. All the trades assume quantity traded as one.
1. Short Sell option contract1 for value Rs 100. The option expired worthless (hence effective buy price = 0). Turnover = ABSOLUTE (100 - 0) = 100
2. Buy option contract2 for value Rs 50. The option expired worthless (hence effective sell price = 0). Turnover = ABSOLUTE(0 - 50) = 50
3. Short Sell option contract3 for value Rs 100. Five days later, Buy it back for Rs 10. Turnover = ABSOLUTE(100 - 10) = 90
Total Turnover = 100 + 50 + 90 = 240
Please provide the correct calculation if I am making a mistake.
Please review my calculation of turnover from option trades for the purpose of applying provisions of sections 44AB and 44AD. All the trades assume quantity traded as one.
1. Short Sell option contract1 for value Rs 100. The option expired worthless (hence effective buy price = 0). Turnover = ABSOLUTE (100 - 0) = 100
2. Buy option contract2 for value Rs 50. The option expired worthless (hence effective sell price = 0). Turnover = ABSOLUTE(0 - 50) = 50
3. Short Sell option contract3 for value Rs 100. Five days later, Buy it back for Rs 10. Turnover = ABSOLUTE(100 - 10) = 90
Total Turnover = 100 + 50 + 90 = 240
Please provide the correct calculation if I am making a mistake.
CA R SEETHARAMAN
(Expert)
14 August 2016
You have correctly calculated the turnover.
Message likes :
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Anil Kumar
(Querist)
15 August 2016
Experts, Any more opinions?
ANIL KUMAR
(Expert)
17 August 2016
Net result of the transaction is the turnover. Here transaction
1 turnover Rs 100/-
2 Turnover -50
3 Turnover 90
Net Turnover 140
1 turnover Rs 100/-
2 Turnover -50
3 Turnover 90
Net Turnover 140
Anil Kumar
(Querist)
17 August 2016
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Anil Kumar
(Querist)
17 August 2016
Anil Kumar Sir, Net result of the transactions is profit or loss, not turnover. Turnover never has a negative sign. If I make two transaction making a profit of Rs 100 in one and loss of Rs 100 in another, the total turnover as per your calculation would be zero, which is not the case. As soon as you I make one transaction, the turnover becomes more than zero and it increases with every new non-offsetting transaction.
Message likes :
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ANIL KUMAR
(Expert)
20 August 2016
Dear Anil Kumar Jee and Seetharaman jee I apologise for wrong reply, both of you are correct
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