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Options Loss



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.
  • 07/02/22 20:01
    Daily USDJPY 11520 PUT07-FEB-22
  • 07/02/22 20:00
    Daily USDJPY 11580 PUT07-FEB-22
  • 07/02/22 20:00
    Daily USDJPY 11500 PUT07-FEB-22
  • 07/02/22 20:00
    Daily USDJPY 11550 PUT07-FEB-22
  • 07/02/22 20:00
    Daily USDJPY 11540 PUT07-FEB-22
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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)


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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
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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."


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