Stock Price Stock 35 35 40 40 45 45 50 50 55 55 60 60 65 65

PUT (50) 15 10 5 0 -5 -10 -15

CALL (50) TOTAL VALUE -15 50 -10 50 -5 50 0 50 5 50 10 50 15 50

(+Lp) (+Lp) (+Lp) (-Sc) (-Sc) (-Sc)

S+ (+Lp)- Sc= Pv(Ex) S+ (+Lp)- Sc= Pv(Ex) S+ (+Lp)- Sc= Pv(Ex) S+Lp-(- Sc)= Pv(Ex) S+Lp-(- Sc)= Pv(Ex) S+Lp-(- Sc)= Pv(Ex)

Stock Price= Rs 50 ; Long Put @ 50; Short Call @ Rs 50 1. Going by the Put-Call Parity S +P - C= Pv(Ex); but here we need to be carefuly with the Positive and Negati 2. As per formula, when reading stocks column from top, at expiery if the Stock is at Rs 35/-, then one need to add Therefore in Total Value column we get Rs50/-

3. As need to remember the value of SIGNS, if Sp is Rs35/-; Long Put is Rs15/- and Short Call is Rs-15/-; then how Value is Rs 50/- (stands to be the Doubt of the calss yesterday!?) if So, then, let me know can we consider an optio strike price can be executed, therefore even if the sign is NEGATIVE we have to consider the NEGATIVE as mere Z formula 35 + 15 -15 = 50, should be read as 35 + 15 -0 = 50 4.On other hand the Short call gets positive, then going by the formula if Stock price is 65, Long put -15/- and short 15=Rs50 Note Click on coloured columns, to get comment

h the Positive and Negative Signs

35/-, then one need to add Rs 15/- to stock column;

ort Call is Rs-15/-; then how come the T.V colum the w can we consider an option when havent reached its er the NEGATIVE as mere ZERO; henceforth going by the

5, Long put -15/- and short call is Rs15/-, then 65+0-

Call

St 50

pre 3

Stock Price 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Put Stock Price 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55

P/L -3 -3 -3 -3 -3 -3 -2 -1 0 1 2 3 4 5 6 7 P/L 7 6 5 4 3 2 1 0 -1 -2 -3 -3 -3 -3 -3 -3

Scall 2 1 0 -1 -2 -3 -3 -3 -3 -3 -3 -3 -3 -3 -3 -3 Scall 4 3 2 1 0 -1 -2 -3 -4 -5 -6 -6 -6 -6 -6 -6

Sc Po 5 4 3 2 1 0 0 0 0 0 0 0 0 0 0 0 S Put 0 0 0 0 0 0 0 0 1 2 3 4 5 6 7 8

p 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 p 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3

PRE 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 PRE

Payoff 0 0 0 0 0 0 1 2 3 4 5 6 7 8 9 10 Payoff 10 9 8 7 6 5 4 3 2 1 0 0 0 0 0 0

P/L -3 -3 -3 -3 -3 -3 -2 -1 0 1 2 3 4 5 6 7 P/L
5 3 1 -1 -3 -5

Call Pay-offs
5 3 1 -1 -3 -5 45 46 47 48 49 50 51 52 53 54 55

Put Pay-offs

40

41

42

43

44

45

46

47

48

49

50

55 56 57 58 59 60

50

51

52

53

54

55