Futures

devinarastogi84
Good Student
Posts: 22
Joined: Thu Apr 17, 2014 9:40 pm

Futures

Postby devinarastogi84 » Thu May 01, 2014 8:22 pm

September futures contract on TCS closed at Rs. 2066 on August 16 and at Rs. 2062 on August 17, 2009. Ravi has a short position of 3000 in the September futures contract from August 16. On August 17, 2009, he sells 2000 units of 12-September-2009 expiring Put Options on TCS at strike price of Rs.2057 for a premium of Rs. 30 per unit. What is his net obligation to/from the Clearing Corporation for August 17, 2009? Kindly Explain this

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

Futures

Postby edupristine » Fri May 02, 2014 10:01 am

There is no mark to market:
Ravi will long at Rs 2062 to cover his short position at Rs 2066.
Hence he is making 4*3000 = Rs 12000
He will get premium for short put option = 30*2000 = Rs 60000
So, the net obligation is = Rs 60000 + Rs 12000 = Rs 72000.


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