Option trading vs Future trading - pros and cons

[traderniftybull]

Bhai, will post my views to both of your queries, in the evening.

 

[traderniftybull]

Q2 ]]] Exercising options means Squaring Off position right ?? [Total - newbie DUMB question ]

Suppose I Have bought a BN28000CE at 50 .. and total invested is 2000.
and call goes to 5 ..
So here my loss is -1800 right now
Max Loss is -2000 ... right ? hain na ?

>> on expiry day BN28000CE closed on 2 .. a total loss of 1920 .. and didn't square off my position ...
whats going to be its implication on Pnl and on TAX .. any higher STT's or other tax to be paid ?

No
Exercising options doesnt means Squaring Off. The 2 terms are different.

Yes, your max loss will be 2000.

After expiry, what matter is the strike that is ITM. Values of ATM or OTM options become zero.
If you fail to sq off your ITM options, then it will be auto squared off by exchange (this is exercise an option, by mistake) and you have to pay STT at an higher rate (cash equity rate). Though now, an option has been made not to treat such trade for higher STT. Contact your broker for procedure to follow.

 

[traderniftybull]

Ok Bro .
Q3 ]] what about ATM and near OTM options in BN.. for DAY TRADING... anyone does this here ?
[[[ obviously ppl trade atm , otm .. I am asking for without Hedging it and making it straddle,strangle , guts,butterfly,spread etc etc ... just simple 1 trade ]]]]
pl. mentions pros n cons

For
straddle, strangle, butterfly, spread etc.
As I do not trade all these option strategies, so it may not be possible for me to explain them.
Let you take help of Google, try to understand it yourself and post your query, if required. Someone here will help you.

 

[okabira]

@traderniftybull Thanks Bhai saab