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NISM Certifications · NISM-Series-VIII: Equity Derivatives · Basics of Derivatives

A trader sells 2 lots of a stock future (lot size 250) at Rs 800. Day 1 settlement price is Rs 792. On Day 2 the trader squares off the position at Rs 805. What is the cumulative profit or loss over the two days?

The trader makes a loss of Rs 2,500. The position is 500 units short. Day 1 gives a gain of Rs 4,000, while Day 2 gives a loss of Rs 6,500, so the net is a loss of Rs 2,500, matching the direct calculation of 800 minus 805 times 500.

  1. AProfit of Rs 6,500
  2. BLoss of Rs 6,500Correct
  3. CLoss of Rs 2,500
  4. DProfit of Rs 2,500

Explanation

Quantity = 2 × 250 = 500. Short position: Day 1 MTM = (800 − 792) × 500 = +4,000. Day 2 = (792 − 805) × 500 = −6,500. Net = −2,500, so the loss is Rs 2,500. Check directly: (800 − 805) × 500 = −2,500. Hence loss of Rs 2,500.

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