Stock Market Profit/Losses

SETTLEMENT OF FUTURES CONTRACTS

All futures contracts for each member are marked-to- market (MTM) to the daily settlement price of the relevant nifty future contract at the end of each day. The profit/losses are computed as the difference between:

1.      The trade price and the day’s settlement price for contracts executed during the day but not squared up.

2.      The previous day’s settlement price and the current day’s settlement price for brought forward contracts.

3.      The buy price and the sell price for nse india contracts executed during the day and squared up.

Table 5 Explains the MTM calculation for a member.

The settlement price for the contract for today is assumed to be Rs.105.

TABLE 5: COMPUTATION OF MTM ATTHE ENDOFTHE DAY:

TRADE QUANTITY SETTLEMENT MTM
DETAILS. Bough t/Sold. PRICE.  
Bought forward from previous day ioo@ioo 105 500
Traded during day Bought 200 @100    
Sold 100 @ 102 102 200
Open Position (Not squared up). 100 @ 100 105 500

TOTAL:

    1200
 

 

The table gives the MTM charged on various positions. The margin charged on the brought forward contract is the difference between the previous day’s settlement price of Rs.100 and today’s settlement price of Rs.l05. Hence on account of the position brought forward, the MTM shows a profit of Rs.500. For contracts executed during the day, money mantra,  the difference between the buy price and sell price determines the MTM. In this example, 200 units

are bought @ Rs. 100 and 100 units sold @ Rs. 102 during the day. Hence the MTM for the position closed during the day shows a profit of Rs.200. Finally, the open position of online trading tips contracts traded during the day is margined at the days settlement price and the profit of Rs.500 credited to the MTM account. So the MTM account shows a profit ofRs. 1200.

The CMs who have a loss are required to pay the mark-to- market (MTM) loss amount in case which is in turn passed on to the CMs who have made a MTM profit. This is known as daily mark-to-market settlement. CMs are responsible to collect and settle the daily mtm profits/losses trading courses incurred by the TMs and their clients clearing and settling through them. Similarly, TMs are responsible to collect/pay losses/profits from/to their clients by the next day. The pay-in and pay-out of the mark-to-market settleent are effected on the day following the trade day.

FINAL SETTLEMENT OF FUTURES

On the expiry day of the futures contracts, after the close of trading hours, NSCCL marks all positions of a CM to the final settlement price and the resulgint profit/loss is settled in cash. Final settlement loss/profit amouont is debited/credited to the relevant CMs clearing Bank account on the day following expiry day of the contract.

SETTLEMENT PRICE FOR FUTURES

Daily settlement price on a trading day is the closing price of the respective futures contracts on such day. The closing price for a futures contract is currently calculated as the last half an hour weighted average price of the contract in the F&O segment of NSE. Final settlement price is the closing price of the relevant underlying index/security in the capital market segment of NSE, on the last trading day of the contract. The closing price of the underlying Index/Security is currently its last half an hour weighted average value in the capital market segment ofNSE.

SETTLEMENT OF OPTIONS CONTRACTS

Options contracts have three types of settlements, DAILY PREMIUM SETTLEMENT, EXERCISE SETTLEMENT, INTERIM EXERCISE SETTLEMENT in the case of option trading courses  contracts on securities and FINAL SETTLEMENT.

DAILY PREMIUM SETTLEMENT

Buyer of an option is obligated to pay the premium towards the options purchased by him. Similarly the seller of an option is entitled to receive the premium for the option sold by him. The premium payable amount and the premium receivable amount are netted to compute the net premium payable or receivable amount for each client for each option contract technical analysis training.

 

Learn option trading course  from expert – Click Here

 

www.Moneymantrastock.com

call @ 099289-77488

 

Leave a Reply

You must be logged in to post a comment.