Futures & Options

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santhosh (Querist)
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01 December 2009 Hi
My Question is pertaining to Indian Stock Market. I have not Invested in stock Market,all i have is only theoretical Knowledge and no Practical Knowledge.

The Question:
I buy a Call option of a Stock (say Reliance) having a Strike Price of Rs 2901.i bought this option when the Option premium was Rs 150/ Option Contract.

I Hold this Option till Exercise date. The option Premium keeps fluctuating Stock Price ( today its Rs 150 tom it is Rs 153 & so on. On the Exercise date assuming Reliance Stock Price is say Rs 2500/share and option Premium is Rs 163.
I will not exercise the option and will lapse it. On Lapsing i that i loose is Option premium.

What is the Option Premium i Loose Is it Rs 150 or Rs 163 ?

Pls Clarify

Thank you for the people who answer !

Sridhar

Sridhar (Expert)
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02 December 2009 Hi you lose only 150/- as thats the premium you pay for buying the call option. Its not of concern on how the premium moves after you buy the call.

I hope i clarified your question

Sridhar
www.austalgroup.net

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