Reg. Options Square off on expiry day

#1
Hi,

I have one query on Options trading,Suppose if i buy an option at strike price of 10 and now if it is trading at strike price 50 and i did not square off the position then will it be forcefully squared off at 50? or at any other price? on the expiry date. Pls clarify my doubt.


Thanks
 

Sunny1

Well-Known Member
#2
Hi,

I have one query on Options trading,Suppose if i buy an option at strike price of 10 and now if it is trading at strike price 50 and i did not square off the position then will it be forcefully squared off at 50? or at any other price? on the expiry date. Pls clarify my doubt.


Thanks
first learn options bit. there many sites. google it.
option of strike price 10 cannot become strike price 50.
 
#3
Sorry its not the Strike Price but it's LTP...

Reframing the query again..

I have one query on Options trading,Suppose if i buy an option which is trading at a price 10(LTP) and now if it is trading at price 50 and i did not square off the position then will it be forcefully squared off at 50? or at any other price? on the expiry date. Pls clarify my doubt.

Thanks
 

MurAtt

Well-Known Member
#4
Squaring off is not at LTP of option. It will be at CMP of Underlying minus Strike Price.

Eg.

You have bot RIL1000 strike call at 10 rs.
On expiry RIL is trading at 1049 and call is trading at 50.
Your option will be forcefully squared off at 1049-1000=49
and
49 x lot size will be credited into your account.

BUT

If RIL is trading at 999.50 and Call is trading at 3 rs. then too, nothing will be credited into your account at cmp for underlying is lesser than the strike price.

Hope this clears your confusion ....

:)
 

AW10

Well-Known Member
#6
"Good till day" is related to your order... The order that u are placing, if it remains not-exectued till end of the day, then it will be removed from system.
I.e. this order has life of 1 day only.

It has nothing to do with your position.. Your position remains open till you take action to squareoff or it falls in the month end settlement.

Hope this helps
 

rajeabc

Well-Known Member
#7
"Good till day" is related to your order... The order that u are placing, if it remains not-exectued till end of the day, then it will be removed from system.
I.e. this order has life of 1 day only.

It has nothing to do with your position.. Your position remains open till you take action to squareoff or it falls in the month end settlement.

Hope this helps
Thanks a lot for your reply.
 

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