When an ITM short call on MCx gold contract delves in to future and get squares off again a long gold future contact,how does turnover get calculated? E.g. short on gold 140,000 call contract and long on gold futures. On call contract expiry, future is at 150,000.
Will turnover be as under;
Option – turnover equals premium received
Future turnover = 140,000 – purchase price.
Pls confirm.
@TeamQuicko can you guide on this pls?
Hey @San1012,
Welcome to the community!
In this case, turnover is calculated as the absolute value of profit or loss, not based on the contract value or the strike price.
For F&O and intraday trading, turnover is calculated by taking the sum of absolute profits and losses from all trades. This means that you add the value of all profits and losses without taking the -ve sign into consideration.
Let’s take a simple example. You made three trades, had profit in the first two and a loss in the third. The turnover calculation is as follows.
Hope this helps!
Turnover for MCX contracts under Section 44AD is calculated using total profits plus losses from trades, not the entire contract value. It determines eligibility for presumptive taxation and simplifies reporting for eligible traders.
