What Happens on option Expiration day

[Smart_trade]

I have sold 5 lot
mar15 call 8800 - Rs 255
mar15 Put 9200 - Rs 300

current price is
mar15 call 8800 - Rs 233
mar15 Put 9200 - Rs242

so profit is call 22 + put 58 = 80 x 125 = 10000

i am new trader so just ask

if any thing wrong please tell me so i will exit

If you are a new trader, dont trade such strategies without understanding the risk and how to come out of these trades with minimum damage if things go wrong. Your doing this trade in a budget month with strike prices just 200 points away from the nifty level was a risky trade with no hedge.In budget months nifty can give a 600-700 points or more swing and you could have been in trouble if you dont know how to manage this trade.

Now as you are home without any damage, and Nifty is going sideways, I suggest that you hold the trade till the Nifty moves either 100 points up or down from the current levels and that time you take your profit. If it stays in sideways range for some more time, you may get some more time premium which will increase your profits....but all that if you understand the risk/reward profile of this trade....else take your profits on 3-4 lots and keep 1-2 lots only for learning and managing the trade.

Smart_trade

 

[Riskyman]

ST da, Nice words of wisdom for any trader. So much for traders to learn from this forum!

 

[adg123]

Its SHORT GUTS -- both strike are in the money (ITM) and both strike has some premium value. The main intention is to collect whole premium from both side and hope market would be range bound till expiry.
This NAKED strategy required frequent monitoring and you should Hedge immediately by NIFTY FUTURE at BEP without second thought (with tight SL) or exit from the loosing leg.

in Jan/2015 series I've lost few amount by taking this SHORT GUT strategy as market rallied and I was not in a position to frequent monitoring..., so take it carefully.