Put and Call option

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sandeep Gupta

sandeep Gupta (Querist)
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15 April 2009 Pls exlain the concept of put and call option and arbitrage with a simple example.

Ashish Aggarwal

Ashish Aggarwal (Expert)
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15 April 2009 Call option is a right to buy. Suppose X buys one lot of Infosys 1371 strike price at a premium of Rs 69 per share. The break even point will be at price of Rs. 1440. after which X wll start making profit maximum loss which X can have is Rs. 69 per share.

Put option is a right to sell. Suppose X buys one lot of Infosys 1371 strike price at a premium of Rs 69 per share. The break even point will be at price of Rs. 1302. after which X wll start making profit maximum loss which X can have is Rs. 69 per share.

sandeep Gupta

sandeep Gupta (Querist)
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16 April 2009 Thank you. Can u give one example of arbitrage functioning if possible