Simplified approach

A bank holds 100 shares currently valued at USD 10, and also holds an equivalent number of put options with a strike price of USD 11 (each option entitles the bank to sell one share).
Since these are equity options, they are subject to the capital charges for general market risk and specific risk according to the standardised framework for equity risk. The capital charge is levied at 8% for general market risk and 8% for specific risk, giving a summed charge of 16%.

Market value of 100 shares = USD 1,000

First, multiply the market value by the sum of general market risk and specific risk charges.
USD 1,000 x 16% = USD 160
Then, calculate the amount the option is in-the-money.

(USD 11 - USD 10) x 100 = USD 100

The capital charge is the general market risk and specific risk charge less the amount the option is in-the-money.
USD 160 - USD 100 = USD 60

A similar methodology applies for options whose underlying is a foreign currency, an interest rate related instrument or a commodity.

Another example for simplified approach
A bank holds 500 shares currently valued at USD 25.50 and holds an equivalent number of put options with a strike price of USD 26.25 (each option entitles the bank to sell one share).

The capital charge is calculated as follows:
Market value of 500 shares = USD 12,750
USD 12,750 x 16% (that is, 8% specific plus 8% general market risk) = USD 2,040

The amount the option is in-the-money = (USD 26.25 - USD 25.50) x 500 = USD 375.
This gives a capital charge of USD 2,040 - USD 375 = USD 1,665