Viewing 5 posts - 1 through 5 (of 327 total)
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  • #5231
    EQSIS
    Keymaster

    What are Margin / MTM / Premium / Strike Price / Expiry Date / lot size?

    #5602
    Pradeep
    Participant
    Rank: Level 4

    Margin : A margin is collateral that the holder of a financial instrument hs to deposit to cover some or all of the the credit risk of their counter party ( broker/exchange)

    MTM : It is the abbreviation of Marked to Market. The positions in the futures contracts for each member is marked-to-market to the daily settlement price of the futures contracts at the end of each trade day.

    Premium : It is money paid by the option buyer to buy either call/put option. The seller of the option contract collects the premium to sell the rights to the buyer of the call/put option.

    Strike Price : The strike price is defined as the price at which the holder of an option contract can buy (call option) or sell (Put option) of the underlying asset when the option is exercised.

    Expiry Date : It is the last day that an options or future contract is valid.

    Lot Size : It refers to the number of underlying shares in one contract. In other words, it is the quantity in which an investor in the market can trade in the Derivative of particular stocks.

     

    #5671
    Abirami Duraisamy
    Participant
    Rank: Level 5

    Margin: The deposit amount paid to exchange by both buyer and seller to sign the future contract, which is refundable.

    MTM – Mark to Market : Day to day leveling of  price movement. Profit/loss will be realised on daily basis.

    Premium – The money paid to seller of the contract for signing the option contract.

    Strike Price- The agreed price printed in the option contract.

    Expiry Date- The maturity date/ the validity date mentioned in the contract.

    Lot size – Number of shared covered in the contract.

     

    #5769
    R.Durga Prasad
    Participant
    Rank: Level 4

    Margin refers to refundable amount paid to the broker in futures.

    MTM means Mark To Market.

    Premium is the amount paid by buyer to seller for signing the options.

    Strike price is the agreed price  for the deal.

    Expiry date is the date where the contract becomes matured.

    Lot size is about the no. of shares going to be traded.

    #5957
    Padmavathi Sukumar
    Participant
    Rank: Level 3

    Margin – is the amount paid by both buyer and seller when signing a future contract. It is a kind of deposit

    MTM – is Mark to Market, which is done at the end of the day for all future contracts based on the closing market price of the share in future contract

    Premium – is the amount paid by the buyer to seller when signing a Call/Put option contract

    Strike Price – is the share price mentioned in future and option contracts. The settlement should be made at this price on the final day whatever the market price may be

    Expiry Date – is the date when settlement should happen for Future and Option contracts. The contract is no more valid beyond this date and a new contract need to be signed for future trading

    Lot Size – is the number of shares that is being traded

Viewing 5 posts - 1 through 5 (of 327 total)
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