Regarding two Months Options

[Punter786]

1.) Now all the Options in India are European style. They are settled on months' expiry. My question is if I buy two month Option contract then can I exercise it before the second month? I mean in one month?

2.) I have heard exchange automatically settles the in-the-money Options on expiry. So if the two months Option can be exercised in the first month expiry then will the exchange settle my contract "automatically" in the first month if it happens to be in-the-money? What if I want to carry forward my position?

Thanks

 

[PGDIMES]

1.) Now all the Options in India are European style. They are settled on months' expiry. My question is if I buy two month Option contract then can I exercise it before the second month? I mean in one month?

2.) I have heard exchange automatically settles the in-the-money Options on expiry. So if the two months Option can be exercised in the first month expiry then will the exchange settle my contract "automatically" in the first month if it happens to be in-the-money? What if I want to carry forward my position?

Thanks

I think you have to re-read the definition of European options. To answer your query, what is the expiry date of the option that expires next month!!! :lol:

 

[AW10]

1.) Now all the Options in India are European style. They are settled on months' expiry. My question is if I buy two month Option contract then can I exercise it before the second month? I mean in one month?

European options can't be excercised by buyer. So straight answer is NO. You can't. But you can always square-off your position in open market by selling it.

2.) I have heard exchange automatically settles the in-the-money Options on expiry. So if the two months Option can be exercised in the first month expiry then will the exchange settle my contract "automatically" in the first month if it happens to be in-the-money? What if I want to carry forward my position?

Thanks

Sept options will expire in sept month. Aug expiry is irrelevant for them.
Exchange will settle only the option that are expiring on that month's expiry date.

Hope that answers your questions.
Happy trading