All Sr. Members pl confirm my understandings
I understand followings in options, Pl tell is it correct or not
Option position can be closed by 3 ways
I) If i purchase call then i have to write call & vice versa
if i purchase put then i have to write put & vice versa
i.e. BY TAKING REVERSE POSITION
II) Doing Nothing
If i am a Holder of call or put & if on expiry date it is In The Money it will auto exercised & difference will be credited , but if it is Out of the money
it will not get excuted & just cancelled
But If i am a writer of call or put & on expiry date my position is in the money
then naturally holder will not exercise it , then whether my position will be auto cancelled as it is or what HELP PL.
& If i sold put/call & @ expiry date it is Out of the money then holder will exercise the option then difference ( st.price & strike price ) will be debited
to my account IS THIS CORRECT ?
III) exercise of option ( available to Holders only)
Suppose I have purchased call option then can i purchase the given stock ( physically) @ strike price bfr expiry date by exercising the option????
Suppose I have purchased put option then can i exercise it by purchasing that share from the market today & on the same day i sale it @ exercise price or i have to take its delivery first then only i can sale it @ exercise price is this possible
kindly help me to confirm my understandings in options
thanks in advance
waittinggg for replyyy
I understand followings in options, Pl tell is it correct or not
Option position can be closed by 3 ways
I) If i purchase call then i have to write call & vice versa
if i purchase put then i have to write put & vice versa
i.e. BY TAKING REVERSE POSITION
II) Doing Nothing
If i am a Holder of call or put & if on expiry date it is In The Money it will auto exercised & difference will be credited , but if it is Out of the money
it will not get excuted & just cancelled
But If i am a writer of call or put & on expiry date my position is in the money
then naturally holder will not exercise it , then whether my position will be auto cancelled as it is or what HELP PL.
& If i sold put/call & @ expiry date it is Out of the money then holder will exercise the option then difference ( st.price & strike price ) will be debited
to my account IS THIS CORRECT ?
III) exercise of option ( available to Holders only)
Suppose I have purchased call option then can i purchase the given stock ( physically) @ strike price bfr expiry date by exercising the option????
Suppose I have purchased put option then can i exercise it by purchasing that share from the market today & on the same day i sale it @ exercise price or i have to take its delivery first then only i can sale it @ exercise price is this possible
kindly help me to confirm my understandings in options
thanks in advance
waittinggg for replyyy
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