Options

Specified asset underlying

Specified time
Specified price strike price exercise price
right without obligation
a price for this premium

Call right without obligation

for buying the underlying
exercise discard

till end of august 1 I can exercise this on the last day of august EUROPEAN
2 I can exercise this anytime from now AMERICAN
till end of august

long call short call writing a call

27-Jul underlying asset 100 today spot

call strike price 95
time end of august

end of august market 110 exercise

83 discard

call will be exercised if end spot price > strike price in the money
call will be discarded if end spot price < strike price out of the money
at the money
EUROPEAN
AMERICAN

>95
<95
around 95
 spot
XYZ 350 27-Jul

call strike 340 p bought a call long

premium 26 q sold a call short written
expiry end of august

end of august action payof prem total

250 discard 0 -26 -26 total
275 discard 0 -26 -26 80
300 discard 0 -26 -26 60
325 discard 0 -26 -26 40
350 exercise 10 -26 -16
20
375 exercise 35 -26 9
0
400 exercise 60 -26 34 250 275 300 325 350 375 4
425 exercise 85 -26 59 -20
-40

if stock
 total

325 350 375 400 425

 from K,s angle
HHH 850 27-Jul
end of sept action call p/of
call strike 850 700 L discards 0
prem 31 725 L discards 0
time end sept 750 L discards 0
type european 775 L discards 0
800 L discards 0
k sells call to L 825 L discards 0
850 L discards 0
875 exercised against us -25
900 exercised against us -50
925 exercised against us -75
950 exercised against us -100
975 exercised against us -125
1000 exercised against us -150
1025 exercised against us -175

if
stock > Strike - (stock-strike-premium)
stock<strike + (premium)
 prem total prof
31 31 total prof
31 31 50
31 31
31 31 0
31 31 700 725 750 775 800 825 850 875 900 925 950 975 1000 1025
31 31
-50
31 31
31 6
31 -19 -100

31 -44
31 -69 -150
31 -94
31 -119 -200
31 -144

- (stock-strike-premium)
+ (premium)
1000 1025
 long call end aug call p of prem tot p of
27-Jul acc 1706.35 spot
1550 0 -54 -54
1600 0 -54 -54
1650 0 -54 -54
1700 0 -54 -54
1750 50 -54 -4
1800 100 -54 46
1850 150 -54 96

long call
max profits infinite
max loss premium

if end aug stock > 1700stock -1700-54

end aug < 1700 -54
ambhuja cement spot 264.98 end aug action
call strike 260 180 discarded
premium 8.5 200 discarded
expiry end august 220 discarded
240 discarded
260 discarded
I sell a call 280 Excercised against me
300 Excercised against me
max profits premium 8.5 320 Excercised against me
max loss infinite 340 Excercised against me

stock > 260 -(stock-260-premium)

stock < 260 8.5
call p of prem tot pa of
0 8.5 8.5
0 8.5 8.5
0 8.5 8.5
0 8.5 8.5
0 8.5 8.5
-20 8.5 -11.5
-40 8.5 -31.5
-60 8.5 -51.5
-80 8.5 -71.5