Friday, October 17, 2008

PLEASE ANSWER THE FOLLOWING QUESTION

CALL OPTION

1) If I Think That A Particular Script Will Go Up , And I Buy A Call Option Of The Script, And If It Goes Up Then
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I Will Get Profit Is It Right ( Yes / No ) , But I Also Want To Know Whether The

A) Premium Will Increase

B) Premium + Strike Price Will Increase
C) Only Stick Price Will Increase

PUT OPTION

2) If I Think That A Particular Script Will Go DOWN , And I Buy A PUT Option Of The Script, And If It Goes DOWN Then
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I Will Get Profit Is It Right ( Yes / No ) , But I Also Want To Know Whether The

D) Premium Will Increase
E) Premium + Strike Price Will Increase
F) Only Stick Price Will Increase

I Have Heard ( In General ) That After 10th Of Every Month The Premium / Strike Price / Both Will Go Down Is It True

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You require more understanding of option basics.I have marked answers to yr Q in bold. The strike price never increases or decreases ,it remain same one you trade a contract with a particular strike price.

It is only the premium that increases or decreases.

Best Wishes,Learn well and trade well !!!!

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