Good evening to one and all.
This is my first post and it concerns my first trade in Options.
I have been always interested to enter the derivatives segment,options especially and have been reading a lot of content about it and yesterday after reading a great deal about it,i initiated my first trade in options but somewhere
i feel my broker was totally dishonest in his intentions.
Please do correct me if i am on the wrong side of things and if my broker was indeed right.
Here is what happened,
Yesterday on 24th May i sold(wrote) ten lots of Nifty 9000 PE @ 1.5 very well aware that Nifty would close well above that strike price.
Today,25th May on expiry,it closed around 9509 and the price of my put closed at 0.05 paise.
After reading a good deal about options,i realized...one can let the options expire worthless and in turn i can get to keep the premium since they are OTM but my trader called me @ 1400 hrs and instructed me,infact in a very stern threatning way if i did not close my position,the exchange would penalize me heavily.
If i what i read and interpreted is true,then there is no need for a writer to close his position since the option is OTM and the option buyer won't exercise it and so it would expire with a value of zero.
I want to know if my broker swindled me to gain brokerage/commission by scaring me to get into a trade rather than let the option expire worthless?
I did close my position towards the close and squared off my position @ 0.05 paise.
Was he right that the exchange would punish me financially or did i interpret my readings right?
I feel dejected and don't know whom to ask.Please help me figure out as to what's right and what's wrong.
P.S - I would again reiterate,i sold(wrote) ten lots of Nifty 9000PE May expiry and after my broker forced me,i had to square it off at 0.05 paise.
Someone please help.
This is my first post and it concerns my first trade in Options.
I have been always interested to enter the derivatives segment,options especially and have been reading a lot of content about it and yesterday after reading a great deal about it,i initiated my first trade in options but somewhere
i feel my broker was totally dishonest in his intentions.
Please do correct me if i am on the wrong side of things and if my broker was indeed right.
Here is what happened,
Yesterday on 24th May i sold(wrote) ten lots of Nifty 9000 PE @ 1.5 very well aware that Nifty would close well above that strike price.
Today,25th May on expiry,it closed around 9509 and the price of my put closed at 0.05 paise.
After reading a good deal about options,i realized...one can let the options expire worthless and in turn i can get to keep the premium since they are OTM but my trader called me @ 1400 hrs and instructed me,infact in a very stern threatning way if i did not close my position,the exchange would penalize me heavily.
If i what i read and interpreted is true,then there is no need for a writer to close his position since the option is OTM and the option buyer won't exercise it and so it would expire with a value of zero.
I want to know if my broker swindled me to gain brokerage/commission by scaring me to get into a trade rather than let the option expire worthless?
I did close my position towards the close and squared off my position @ 0.05 paise.
Was he right that the exchange would punish me financially or did i interpret my readings right?
I feel dejected and don't know whom to ask.Please help me figure out as to what's right and what's wrong.
P.S - I would again reiterate,i sold(wrote) ten lots of Nifty 9000PE May expiry and after my broker forced me,i had to square it off at 0.05 paise.
Someone please help.
Last edited: