how to calculate nifty banknifty F&O margin, profit-loss ? | Dalalstreetwinners™ (2024)

FAQs

How is profit and loss calculated in Nifty options? ›

P&L = [Difference between buying and selling price of premium] * Lot size * Number of lots. Of course, 1500 minus all the applicable charges. The P&L calculation is the same for long put options, squared off before expiry.

To sell a same nifty options contract, traders have to pay around = nifty future margin of 58,800/- plus 7500 rupee premium amount = 66,300/- rupees. Nifty future profit loss will be calculated like this: Nifty future buy call 9800 to 9900 minted profit +100 points and its 1 point is equivalent to 75 rupees.

Nifty futures is a derivative contract which means it gets its value from the behavior of its underlying asset. Nifty futures' underlying asset is the Nifty50 index itself. If the value of the index goes up, then the value of the futures contract also increases. Similarly, if Nifty drops, then so do the Nifty futures.

In case of a call option on the Nifty it will be ITM if the market price is greater than the strike price. If the 9800 Nifty call option is trading in the market at Rs. 70 and if the spot Nifty is at 9850 then the intrinsic of the Nifty call will be Rs. 50(9850-9800).

We multiply the purchase value by the lot size and then multiply the sales value by the lot size. The difference between this gives us the profit or loss, which is the turnover.

The net profit margin calculation is simple. Take your net income and divide it by sales (or revenue, sometimes called the top line). For example if your sales are $1 million and your net income is $100,000, your net profit margin is 10%.

Options profit is calculated by subtracting the strike price and option price from the current share price and multiplying by the number of contracts (100 shares).

To calculate the P/E ratio of the Nifty 50 index, you need to take the sum of market capitalisation of all 50 companies and divide it by the sum of their profit after tax. This will give you the P/E ratio of the index.

No loss option strategy : “in this strategy, You have to write extreme in the money call and put options at the same time and hold them till expiry. This strategy always pays 10-20% average return on capital”

How to trade Nifty options profitably? ›

You must pick a point where the first two candles are either both bullish or both bearish. If your first two candles are bullish, you must place the buy order at the high of the second candle. Once this is triggered, the stop loss order must be set at the low of that same candle.

Pay 20% upfront margin of the transaction value to trade in cash market segment.

Bank Nifty Option Trading can be profitable if proper tips and strategies are followed and risk management is implemented.

Bank Nifty volume PCR is calculated by dividing the trading volume of all the put option contracts on a given day by the trading volume of all the call option contracts..

You can place an order for 900 quantities i.e 36 lots in one go for Bank nifty.

Further, losses from business can be set off against income chargeable to tax under any head of income (other than salary income), during the same financial year (FY). Accordingly, in the instant case, current FY loss from F&O trading can be set off against dividend and interest income of the current FY.

Do I need to pay Advance Tax on my F&O Profits? It is a non-speculative business income taxable at normal slab rates. If income under all heads of such F&O trader exceeds INR 10,000 during a financial year, then he/she is liable to pay advance tax in four quarterly installments as per the applicable due date.

The premium margin is paid by the buyers of the options contracts and is equal to the value of the options premium multiplied by the quantity of options purchased.

Your business's profit (or loss) is the difference between your income and your expenses. Put simply, that's the amount that comes into your business and the amount that goes out.

To determine the gross profit margin, we need to divide the gross profit by the total revenue for the year and then multiply by 100. To determine the net profit margin, we need to divide the net income (or net profit) by the total revenue for the year and then multiply by 100.

What is 33% profit margin? ›

A gross profit margin of 0.33:1 means that for every dollar in sales, you have 33 cents to cover your basic operating costs and profit. Some business owners will use an anticipated gross profit margin to help them price their products.

It's simple to find gross profit margin automatically using the calculator. To calculate manually, subtract the cost of goods sold (COGS) from the net sales (gross revenues minus returns, allowances, and discounts). Then divide this figure by net sales, to calculate the gross profit margin in a percentage.

The 20%-25% profit-taking zone is based on the stock's ideal buy point. That may differ from your own purchase price. As we saw in How to Buy Stocks the ideal buying range is from the ideal buy point up to 5% above that price. So let's say you bought 2% above the ideal buy point.

Their net margin would be that difference minus the costs involved of making the trades. Profit margin can be expressed as either a percentage or an actual amount. For example, if you made $10 profit from a $100 investment your profit margin would be $10 or 10%.

The Probability of Profit, or more commonly referred to as POP, is the theoretical probability of your equity/ETF position(s) making at least $0.01 on a trade. POP derives from a set of variables such as position type, whether you are long or short, time, and volatility (for the distribution curve).

To buy Nifty futures, you must reach out to a broker and open a trading account. This type of trading does not require Demat accounts. These contracts are available for trade on both NSE and BSE. Since NSE makes for a highly liquid derivative platform, most investors prefer to invest in Nifty futures through NSE.

Bank Nifty is calculated using the free float methodology where the stocks are weighted based on the free float market capitalization. While the Bank Nifty was launched on September 15, 2003, it uses January 01, 2000 as the base year with a base value of 1000.

Nifty is calculated using the float-adjusted, market capitalization-weighted methodology. The index reflects the total market value of all the stocks in the index relative to a particular base period. The base value of the Nifty is 1000, and the base market capital is ₹ 2.06 trillion.

Consider using the cash-secured put strategy to build up your Bank Nifty stock portfolio before beginning the covered call strategy. Cash secured Put is an options trading strategy that involves selling put options on an underlying asset with the intention of buying the asset if the option is exercised.

A Bull Call Spread is made by purchasing one call option and concurrently selling another call option with a lower cost and a higher strike price, both of which have the same expiration date. Furthermore, this is considered the best option selling strategy.

Who is best Bank Nifty option tips provider? ›

About Shyam Advisory® as Best Bank Nifty Tips Provider

We are perfectly capable to work with investors, traders, and intermediaries. Our motto is to preserve the capital of the client first and then invest the money to gain profit.

Understand the Leverage Well

You can buy and sell options with relatively lower risk because you do not need to actually own the stock. Thus, by putting a smaller amount (option premium)- you get exposure to a significantly higher contract exposure. This is known as leverage.

Out of the 45.24 lakh individual traders in futures and options (F&O) in the financial year 2021-22, only 11% made profit, shows a report by Securities and Exchange Board of India (Sebi).

The 5x margin gives you 5 times leverage, meaning, you can buy the shares worth 5 times your capital.

Trading at the Opening of the Market

Volatility is not all bad. The ideal amount of volatility for beginners arrives in the market after these initial extreme trades have occurred. Hence, this makes the time frame between 9:30 am to 10:30 am the ideal time to make trades.

The bank nifty has a beta of 1.2. Beta measures the volatility of any stock or index. This value is compared to the nifty. A beta value of 1.2 shows that the bank nifty will always move ahead of the nifty.

In India, some experts consider the best time frame for intraday trading to be from 9:30 AM to 10:30 AM and from 2:30 PM to 3:15 PM.

The NIFTY closing prices are calculated by taking the last half an hour weighted average closing prices of the constituents of the index.

Which PCR is bullish or bearish? ›

For instance, a very high PCR signals an extreme bearish market sentiment. Also, it signifies that the market may bottom out and show some upward trend. On the other hand, if the PCR is at a very low level, it signals an extreme bullish market.

An average put-call ratio of 0.7 for equities is considered an oversold market while above 1.5 is considered overbought. In the context of Indian markets, Nifty is a widely traded option and as the benchmark index, the PCR will define the market trend.

After the June 2023 expiry, the Bank Nifty long-term options contracts (where the expiry is greater than 3 months) will be revised from the current lot size of 25 Qty to 15 Qty.

NEW DELHI: In a bid to boost retail participation in the derivative segment, the National Stock Exchange (NSE) has reduced the market lot size for Nifty Bank futures and options to 15 from 25. The new rule is applicable from the beginning of July 2023 contracts.

The maximum quantity allowed per order is 100000 as per Zerodha's risk management policy. Orders that exceed these limits are rejected.

To calculate profits or losses on a put option use the following simple formula: Put Option Profit/Loss = Breakeven Point – Stock Price at Expiration.

Options profit is calculated by subtracting the strike price and option price from the current share price and multiplying by the number of contracts (100 shares).

Intrinsic Value

It is equal to the difference between the strike or exercise price and the asset's current market value when the difference is positive.

Maximum profit

The maximum potential profit is equal to the strike price of the put minus the price of the put, because the price of the underlying can fall to zero.

The profit and loss of an option position at expiration is a function of the original premium and the difference in price between the futures contract and the strike price of the option.

How do you calculate option strategy? ›

The model's formula is derived by multiplying the stock price by the cumulative standard normal probability distribution function. Thereafter, the net present value (NPV) of the strike price multiplied by the cumulative standard normal distribution is subtracted from the resulting value of the previous calculation.

How To Calculate Profit In Call Options. To calculate profits or losses on a call option use the following simple formula: Call Option Profit/Loss = Stock Price at Expiration – Breakeven Point.

The premium margin is paid by the buyers of the options contracts and is equal to the value of the options premium multiplied by the quantity of options purchased. For example, if 1000 call options on ABC Ltd are purchased at Rs. 20/-, and the investor has no other positions, then the premium margin is Rs. 20,000.

PCR is calculated by dividing the current open interest in a Put contract on a specific day by the open Call interest on the very same day. Put volumes are the financial market indicator for the total initiated Put option over a specific time frame.

When you sell an option, the most you can profit is the price of the premium collected, but often there is unlimited downside potential. When you purchase an option, your upside can be unlimited and the most you can lose is the cost of the options premium.