I think I’m doing something wrong – help with options calculation

I’m learning about options (from the ASX course), think I understand the basics and am interested in buying options in the XJO index.

As a test calculation, I want to model the financial impacts of hedging the XJO both ways – for both a drop and a rise. Yet the profit numbers come out too high to be true – can anyone help me understand what I’m doing wrong?

Calls / Puts from Commsec – I’ve used the Offer values for my caluclation

Example 1 – XJO moves 1% up, $500 investment = $11,834 profit.

Exercise Cost Date
Call 6700 1.01 21-Jan
Put 6700 1.3 21-Jan
Current Price $ 6,683.00
Movement

1%​

Price post movement

6749.83​

Purchase Amt $ 500.00
Result
50% split
Bought Value per option Value Tot
Call

247.5248​

49.83​

$ 12,334
Put

192.3077​

-49.83​

$ –
Total $ 12,334
End Position $ 11,834

Example 2 – XJO moves 1% down, $500 investment = $17,111 profit.

Exercise Cost Date
Call 6700 1.01 21-Jan
Put 6700 1.3 21-Jan
Current Price $ 6,683.00
Movement

-1%​

Price post movement

6616.17​

Purchase Amt $ 500.00
Result
50% split
Bought Value per option Value Tot
Call

247.5248​

-83.83​

$ –
Put

192.3077​

83.83​

$ 16,121
Total $ 16,121
End Position $ 15,621

Help?!

 

Be the first to comment

Leave a Reply

Your email address will not be published.


*