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F&o transaction

Praveen Mundada (1 Points)

24 August 2020

How to calculate turnover and profit of options?

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6 Replies

Sahil Meghani (Article) (32 Points)
Replied 25 August 2020

To calculate the futures and options turnover, one has to take care of the following:

While calculating the turnover, the total of positive and negative differences are to be considered

The premium received by the trader while selling the options has to be included

In case of reverse trades entered by the trader, the difference thereafter will also be a part of the turnover

In simpler terms, under F&O trading, the turnover of futures will be the absolute profit, which is the sum of positive and negative differences.
Futures Turnover = Absolute Profit (sum of profit and loss made on various transactions throughout the year)
The turnover of options can be calculated by adding the premium obtained on selling the options to the absolute profit.
Options Turnover = Absolute Profit + Premium obtained on selling the options

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J Ja (15 Points)
Replied 25 August 2020

Both profit and loss in f and o trade should add and consider as turnover eg, profit 2,loss1 then your turnover is 3, actual profit is 2-1 =1

sadik shaik (4 Points)
Replied 25 August 2020

For options turnover:
add absolute profit only ? no need to include loss ?

Need to add option premium recieved means?
options selling value=option premium

SUSHANT BIDAYE (578 Points)
Replied 25 August 2020

Yes the answer given is too confusing.

if I buy 100 atu option at 75 and sell at 60.

what is the turnover and taxable profit.

can Mr. Sahil explain please.

would be grateful.

J Ja (15 Points)
Replied 25 August 2020

To calculate turnover, sum up the value of your positive and negative trades. Say if you have a positive F&Otrade of Rs 40,000 and negative trade of Rs 36,000, your income is Rs 4,000 but your turnover shall be Rs 76,000

sadik shaik (4 Points)
Replied 25 August 2020

Explain this please:
The turnover of options can be calculated by adding the premium obtained on selling the options to the absolute profit.

we already adding absolute profit and loss of option trading.

again we need to add option premium received to the above calculation. ?