Examples of Put Options in a sentence
Put Options - If an employee buys a put option, the employee is considered to have sold the underlying security on the date the option was purchased.
The purchase of Put Options does not increase the market risk in the fund as the risk is already in the fund's portfolio on account of the underlying asset position.
At Expiration, Options that are in the money will be automatically closed out at intrinsic value, that is, in the case of Call Options, the amount by which the closing price of the specified FX/CFD exceeds the strike price, and in the case of Put Options, the amount by which the Strike exceeds the closing price of the specified FX/CFD.
Put Options -If a Mellon employee buys a put option, the employee is considered to have sold the underlying security on the date the option was purchased.
If the share price of Nifty falls to Rs.5,500 on expiry day, the net impact will be as follows:Premium expense = Rs.84*100* 50 Rs. 4,20,000 Option Exercised at = Rs. 5,500Profits for the Fund = (6000.00–5,500.00) * 100*50 = Rs. 25,00,000 Net Profit = Rs. 25,00,000 – Rs. 4,20,000 = Rs. 20,80,000 In the above example, the Investment Manager hedged the market risk on 5000 shares of Nifty Index by purchasing Put Options.