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I lost Rs. 23.71 lakh due to a covered call in Bajaj Finance

Started by Michael Gonsalves, Jul 29, 2022, 01:33 AM

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Michael Gonsalves

Last month, the stock markets were in such a bad shape, that a Put of 2000 shares that I had sold of the Bajaj Finance 5800 strike price had devolved upon me and I was forced to take delivery. The stock was sinking fast and so I hurried to sell a Call at the same strike price of 5800.

Unfortunately, in the meantime, the markets have turned from aggressively Bearish to aggressively Bullish. Bajaj Finance shot up an incredible 10.6% today to close at Rs. 7076.

As today is the expiry, no adjustments are possible and I have no option but to give delivery at the strike price of Rs. 5800.

I suffered a (opportunity) loss of Rs. Rs. 23.71 lakhs. The loss is reduced to Rs. 19.35 lakh because I had sold some Puts to salvage the Calls.