Jump to content
  • 0

Options Loss


MrNSig

Question

Hi IG, Today i bought 5 put options sell strikes at 11580, 11550, 11540, 11520, 11500. Usd Jpy expiry 8pm, usd jpy was 11507 at expiry time, can someone explain how i still loss the ones above 11507 please as i'm confused.
DATE/TIME
MARKET
SIZE
OPENING
CLOSING
PROFIT/LOSS
Total
-£36.05
  • 07/02/22 20:01
    Daily USDJPY 11520 PUT07-FEB-22
    +0.50
    30.4
    12.9
    £-8.75
  • 07/02/22 20:00
    Daily USDJPY 11580 PUT07-FEB-22
    +0.50
    85.1
    72.9
    £-6.10
  • 07/02/22 20:00
    Daily USDJPY 11500 PUT07-FEB-22
    +0.50
    15.5
    0
    £-7.75
  • 07/02/22 20:00
    Daily USDJPY 11550 PUT07-FEB-22
    +0.50
    56.2
    42.9
    £-6.65
  • 07/02/22 20:00
    Daily USDJPY 11540 PUT07-FEB-22
    +0.50
    46.5
    32.9
    £-6.80
Link to comment

3 answers to this question

Recommended Posts

  • 0

Hi @MrNSig

Thanks for the query. 

Break even when buying a put = Strike Price - Option price

Therefore using the the 11520 strike as an example break even = 11520 - 30.4 = 11489.6

Therefore the market would need to settle at 11489.6 or below to make profit. 

Settlement was at 11507: 

Therefore P&L can be calculated as follows: (11489.6 - 11507) * 0.5 (bet size) = -8.7

Commission : 0.1GBP per contract or 0.1GBP per 1GBP per point position

Therefore commission payable = 0.5*0.1GBP = 0.05 GBP

True PnL= -8.75GBP

A more simple formula is as follows:

Profit/Loss = Bet Size x (Option closing price - Option opening price)

 

  • Like 1
Link to comment
  • 0

I am not from IG but who cares.

 

when you are option BUYER either put or call, you have to overcome the premium in order to be profitable at expiry. so for example, the 11550 PUT would be profitable only if USD JPY goes under 11493.8 onwards i.e, 11550 - premium paid 56.2. Had it closed at 11550 you would have lost the entire premium of 56.2  however you "got back"  42.9 implying the close was at 11507.1 (11550-42.9)

 

Edited by eastside
  • Like 2
Link to comment
  • 0

You need to study the Greeks

"

Probability of Being Profitable

Delta is commonly used when determining the likelihood of an option being in-the-money at expiration. For example, an out-of-the-money call option with a 0.20 delta has roughly a 20% chance of being in-the-money at expiration, whereas a deep-in-the-money call option with a 0.95 delta has a roughly 95% chance of being in-the-money at expiration."

"Theta is good for sellers and bad for buyers."

https://www.investopedia.com/trading/getting-to-know-the-greeks/

  • Like 1
Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • Dopamine emerges as a beacon of innovation in the world of cryptocurrency management, offering a non-custodial, secure, and anonymous mobile app wallet. With over two million downloads and a robust user base, Dopamine is reshaping the landscape of decentralized finance (DeFi) on both Android and iOS platforms. Let's delve into the features and functionalities that make Dopamine a must-have tool for navigating the cryptocurrency market. Key Features: 1. Comprehensive Portfolio Tracking: Dopamine's native token, $DOPE, empowers users to monitor their favorite projects from a vast collection of over 10,000 coins, ensuring informed decision-making in the dynamic crypto market. 2. Enhanced Security Measures: With built-in Anti-Money Laundering services, Dopamine enables users to safeguard their assets by identifying potential fraud and assessing risk scores associated with their wallets. 3. Real-Time Market Insights: Stay ahead of the curve with Dopamine's ability to track market trends and identify coins making significant moves, ensuring users remain informed and proactive in their investment strategies. 4. Cross-Chain NFT Transactions: Seamlessly send and receive NFTs across various blockchains, including Ethereum, BSC, Fusion, and more, providing users with unparalleled flexibility and interoperability. 5. Efficient Information Management: Dopamine simplifies data management by allowing users to save essential information and access it instantly, streamlining their crypto journey with convenience and ease. 6. Convenient Fiat On-Ramp: Facilitating seamless transactions, Dopamine enables users to buy crypto directly from their credit or debit card within the app, eliminating the need for multiple platforms and intermediaries. 7. DeFi Gaming Integration: Dive into the exciting world of decentralized finance gaming with Dopamine, offering users access to a diverse range of DeFi games directly from the app, adding a touch of entertainment to their crypto experience. With its innovative features, commitment to user empowerment and upcoming listing on Bitget exchange, Dopamine stands as a revolutionary platform that caters to the diverse needs of cryptocurrency enthusiasts. As the cryptocurrency market continues to evolve, It remains at the forefront, providing users with a secure, versatile, and intuitive solution for managing their digital assets and exploring new horizons in decentralized finance.
    • Name of stock: Adventus Mining Name of Stock Exchange: TSX Leverage or Share dealing: Share dealing Ticker: ADZN Country of stock: Canada
×
×
  • Create New...
us