Options - when to exercise this call (european style)

Hi Everyone,

I have a question here in how to make profits in this trade. Any help is much appreciated.

I have a call trade something like this. Numbers are just for clarity.

CALL PFC190CE buyed at 4.75... I would expect the target to hit @ 10. consider the expiry is next week. After 2 or 3 days of my buying, consider it reached the target. how can I make profit in this trade? because I read that option can be exercised only at the time of expiry in european style options.

Pls clarify. ( One person told me that we can hold/book the price and exercise, I dont understand that completely)

Quick help is much appreciated.

hey please note all Indian stock options are American style means they can be exercised at any trading day but nifty options are European style which can be exercised only on the last Thursday of the month
American or European contracts can be traded at any trading day of the month

so your doubt it it is on PFC it is a stock option which can be exercised at any trading day. hope this clarifies your doubt-----so one will exercise option only if you dont have any buyers paying the right price for you.people don't prefer to exercise the options so as to avoid any excessive TURNOVER charges that has to be paid on exercising

Kiran,

You are mistaken....!!!

Stock options used to be American Type options till about mid last year.... now everything is European Options.... Kapisch

SG

Hi Everyone,

I have a question here in how to make profits in this trade. Any help is much appreciated.

I have a call trade something like this. Numbers are just for clarity.

CALL PFC190CE buyed at 4.75... I would expect the target to hit @ 10. consider the expiry is next week. After 2 or 3 days of my buying, consider it reached the target. how can I make profit in this trade? because I read that option can be exercised only at the time of expiry in european style options.

Pls clarify. ( One person told me that we can hold/book the price and exercise, I dont understand that completely)

Quick help is much appreciated.

Don't know why would you want to exercise.... You bought it @4.75 in the same way you sell it @ 10 and the difference is Your profit...As simple as that...!!!

Assigning & Exercising in European Options is ONLY on Expiry day...!!!

SG

your view always enriched us, Thanks lot, now think a different situation , sold a wipro 420 put at Rs. 7.50/- on expiry day and want to cover it at the end of expiry day but at that time I am not getting proper price because of spread ' i.e ASK & bid --Rs. 8.85& Rs. 6, though last traded price Rs. 6.50/-,if i cover now at Rs. 8.85/-, I have to face loss and if it is not covered then what will happen? How much extra cost will be charged by exchange for closing the trade?
waiting for your response.

BULLS (SG) presence ought here make everybody feel quite comfortable don't worry @ mmca2006