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What means by Positional call in MCX?

Updated: 9/20/2023
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Q: What means by Positional call in MCX?
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What is the difference between MCX and NCDX?

MCX stand for Multi Commodity Exchange Ltd. NCDEX stand for National Commodity & Derivatives Exchange Ltd. MCX commencement operations on Nov. 2003, NCDEX commencement operations 15 Dec. 2003. In MCX 40 Commodities, when NCDEX numbers of commodities are 59.


What long position is necessary to hedge a short call option?

It depends on whether the short call is covered or naked. If you have a short covered call (you own the stocks you wrote the call on), you wouldn't hedge it--if the call gets exercised you turn over the stocks you own and call it good. If you have a short naked call (you don't own the stock), hedge with a long call that has a strike price no more than the strike price of the short call. Maybe a few bucks less, if you can get it--if the counterparty to your short call exercises it, you exercise your long call, turn over the stock you received. Your profit will be the difference between the premiums on the calls, plus the difference between the strike prices.


How do you hedge a call option?

You hedge a call you sold by purchasing a put in usually the same security.


What happens when you Short a call option?

"Shorting a call" is better known as writing a naked call. Basically, a naked call is a call on a position you don't hold, and it has unlimited risk--if you get exercised and the strike price plus the premium is lower than the stock price, you must make up the difference out of your margin account--or you'll receive a margin call from your brokerage. Many brokerages won't allow you to write a naked call, and the ones that will demand a very large margin account and a lot of experience in trading options.


When you sell a call option who gets the dividend?

Dividends don't play into call options. If you sell a covered call and it expires worthless, you'll receive any dividends from the stock because you still own the stock. If it's exercised, the new owner receives them because the stock is hers now. The money that changes hands when you sell a call is the "premium," and the person who sells the call gets that.