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| Discuss If we sell a Put option & dont get a seller to buy what is the situation at the Options within the Traderji.com - Discussion forum for Stocks Commodities & Forex; Originally Posted by AW10 Thanks ARMHM for explanation. I am 1000% in synch with you. ... |
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#21
26th June 2008, 02:45 PM
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Re: If we sell a Put option & dont get a seller to buy what is the situation
Quote:
for the writer of reliance 2350 put option 2400 is ITM while 2400 is OTM for the buyer. brokerages and other costs not considered just to keep things simple. 
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#22
27th June 2008, 03:50 AM
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Re: If we sell a Put option & dont get a seller to buy what is the situation
Mahesh,
Options definition of ITM / ATM/ OTM depends does not depend change from Buyer or sellers perspective. For CALL option if Option Strike Price = Current mkt Price Then it is At The Money (ATM) if Option Strike Price < Current mkt Price Then it is In The Money (ITM) if Option Strike Price > Current mkt Price Then it is Out of The Money (OTM) For PUT option if Option Strike Price = Current mkt Price Then it is At The Money (ATM) if Option Strike Price < Current mkt Price Then it is Out of The Money (OTM) if Option Strike Price > Current mkt Price Then it is In The Money (ITM) For Ex - RIL PUT 2350 when spot price is 2350 , is ATM - RIL PUT 2350 when spot price is 2400 , is OTM (hence real worth is ZERO) - RIL PUT 2350 when spot price is 2000 , is ITM (and real worth is 150). Option Buyer controls the right on real worth and has choice to make. But for Seller, there is no choice but only the obligation equal to the real worth. Happy Trading.
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#23
27th June 2008, 07:12 PM
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Re: If we sell a Put option & dont get a seller to buy what is the situation
Quote:
I deciphered that conclusion from chakravu's post.
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#24
7th July 2008, 07:16 PM
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Re: If we sell a Put option & dont get a seller to buy what is the situvation
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#25
7th July 2008, 08:19 PM
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Re: If we sell a Put option & dont get a seller to buy what is the situation
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Regards.
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#26
7th July 2008, 10:40 PM
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Re: If we sell a Put option & dont get a seller to buy what is the situation
One thing always works in favour of option writer (seller) and that is time. If the scrip or index is moving sideways then automatically the value of option diminishes as the time passes. Whereas option buyer only gains when that particular stock or index is rapidly moving in his favour.
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#27
7th July 2008, 10:42 PM
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Re: If we sell a Put option & dont get a seller to buy what is the situation
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#28
8th July 2008, 05:27 PM
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Re: If we sell a Put option & dont get a seller to buy what is the situation
Thanks ARMHM for correcting it.
I am sorry about that typo, Citrus. The real worth of PUT will be 350 (i.e strike price of 2350 minus mkt price of 2000). Happy Trading
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#29
13th July 2008, 01:01 PM
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Re: If we sell a Put option & dont get a seller to buy what is the situation
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#30
22nd July 2008, 05:43 PM
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Re: If we sell a Put option & dont get a seller to buy what is the situation
Hi !
Say, I bought an option but I am not finding any buyer to whome to sell. Now what will happen ? Assume its an out of money option.
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