Query on Option Square Off..

Hello All,
I have a query on 'Square Off' process for options. Here is the scenario.
1. Bought a call option say @20
2. Squarred off position say @25

Now my net position is 0.
Is assignment possible even after positions are squarred off?(Before expire day)
If so how to handle the scenario.
Also if the assignment happens, what price is will be considered for profit/loss calculation..

You should be thinking of Assignment when u sell option. When u buy option, then u have the RIGHT and all control in your hand.. How can someone (including Exchange) assign to you.. As a buyer, u can make choice and decide to excercise your right. You are the Boss here.

When u have squared off your bought option.. i.e. u have sold the right that u bought.
So you have nothing to worry. You have no open position in the market and nothing can happen to you.

Happy Trading

That is what I love about buying options... I am still learning though but here was my first practical trade in options...

Bought 1000 Aug 4700 CE @ 61.40 , Sold all @ 72
Before we close the market today, I again bought 1000 @ 47, though it closed at 40.50

Does anyone has any comments on me buying 4700 CE at 47 in this corrective market... was it a good move, bad move... comments are welcome

keep STOPLOSS 35
so high selling pressure seems @ market

I sold a NIfty 4900 option Jan option at Rs.18.... Now due to sudden crash of NIfty, Now its being trded at 80.

As tomo. is the last day for Jan options...what shd i do to avoid any disaster..
1. IF i let the option expire , being the write of the option do i need to buy those 50 Nifty shares.. at 80 ( assumpting thats the closing price ) ?

2. Or the broker will deduct ... the amt. ( 80-18 ) * 50 + brokerage from my account ??

Thing is.. i am sonfused how it works.... on the last day...

will it be wise to square off... or to leave it and let the exchange do it for u.. in this situation..

Kindly let me know... asap

Nifty Spot move on expiry day are always choppy. Price try to move toward key strike price i.e. 4800 or 4900 for tomorrow. As both Call writer / put writer try to protect their positions. So option trading on last day becomes very much like NF trading.. cause your delta is almost 1 now for most of the strike. Major part of the time value has evaporated now and what is remaining is only intrinsic value and that will move almost point to point with nifty spot.

So,
1) if you know intraday trading and have some strategy to trail your stops then go ahead with that and place trailing stop order to Buy and squareoff. This will ensure that if prices fall further, then u will be not loosing too much.
2) If not then, decide on your max loss limit (say 100 points, and if nifty spot breaks below that, then take short NF position. So that u limit loss on short put by short nifty below a certain level. You can place trigger/sell order for nifty future in advance.

3) If you are still unsure, then close position at whatever price is possible and in future don't let your position to reach last days specially when they are in loss and not protected.

In all the cases, don't beat yourself later cause market bounced back after u have exited at loss. There is almost 50% chance that will happen. But there are same 50% chance that u had exited at better price.

Again - something that I learnt thru hard way.

Happy Trading