TOPIX Options

TOPIX options - example

Update : Nov. 01, 2001

Example 1: Buyer of Call Option

1. Customer A bought one (1) TOPIX call option with an exercise price of 1,700 points at an option price of 50 through Trading Participant B.
2. As Customer A was given a right to buy TOPIX at 1,700, he paid an option premium of 500,000 yen to the seller of the option.
3. On the exercise day, the TOPIX special settlement price was 1,800.00.
4. Customer A exercised the call option.
5. Recognized profit = 10,000 yen x (1,800-1,700) x 1 = 1,000,000 yen

Example 2: Seller of Call Option

1. Customer A sold one (1) TOPIX call option with an exercise price of 1,700 points at an option premium of 50 through Trading Participant B. *Customer A deposited a margin with Trading Participant B.
2. Customer A gave the buyer a right to buy TOPIX at 1,700 and received an option premium of 500,000 yen.
3. On the exercise day, the TOPIX special settlement price was 1,800.00.
4. The buyer exercised the call option.
5. Recognized loss = 10,000 yen x (1,700-1,800) x 1 = 1,000,000 yen

Example 3: Buyer of Put Option

1. Customer A bought one (1) TOPIX put option with an exercise price of 1,700 points at an option price of 50 through Trading Participant B.
2. As Customer A was given a right to sell TOPIX at 1,700, he paid the option premium of 500,000 yen to the seller of the option.
3. On the exercise day, the TOPIX special settlement price was 1,600.00.
4. Customer A exercised the put option.
5. Recognized profit = 10,000 yen x (1,700-1,600) x 1 = 1,000,000 yen

Example 4: Seller of Put Option

1. Customer A sold one (1) TOPIX put option with an exercise price of 1,700 points at an option price of 50 through Trading Participant B.
   
   *Customer A deposited a margin with Trading Participant B.
2. Customer A gave the buyer a right to sell TOPIX at 1,700, and received an option premium of 500,000 yen.
3. On the exercise day, the TOPIX special settlement price was 1,600.00.
4. The buyer exercised the put option.
5. Recognized loss = 10,000 yen x (1,600-1,700) x 1 = -1,000,000 yen