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This is a theoretical definition of variance:
Last month, in the Sensex, a strike option was sold and exited with slippage at 469. A hedge, 200 points away, was also exited with slippage at 241.
The calculation is as follows:
469 (exit price of strike option) - 241 (exit price of hedge) = 228
Theoretically, this value should be 200.
@saurabhyadavz The issue is that they lack a technical background, so they are unaware of the possibilities. As a result, they are merely imitating the products of brokers from other countries.