Short selling options

S

Star Scream

New Member
#1
#1
Hi,
I needed some clarification regarding short selling of options.

When I short sell say 100 shares of a company I have to buy 100 shares of the same company before the end of trading on that day itself.

What if i short sell a call option?
Do i need to buy a call option of same expiry and strike price before the end of trading on the same day itself?

Thanks!
 
R

ranj_2k

Active Member
#3
#3
Star Scream said:
Hi,
I needed some clarification regarding short selling of options.

When I short sell say 100 shares of a company I have to buy 100 shares of the same company before the end of trading on that day itself.

What if i short sell a call option?
Do i need to buy a call option of same expiry and strike price before the end of trading on the same day itself?

Thanks!
Click to expand...
If you have sold a call option, you can square off the position by buying call of same strike price any day before expiry of that series. If you have left the position as it is, at the end of expiry, it will be exercised by Exchange automatically on the basis of closing price of underlying and your a/c will be debited / credited accordingly by the broker.
 
R

ranj_2k

Active Member
#5
#5
DanPickUp said:
Hy ranj_2k

I guess you are one of the first serious posters today in this forum beside my friends.

What I saw to day in this forum makes me really think, if I am in the right place. I mean, did you see what happen in the beginner section. I informed traderji about that poster and there was no reaction. I mean, I am a member of different forums in this world, but **** like that never happens anywhere.

To this thread : There was never a question about the last or expiry day of anything in this thread if you read it in the right way. If I made a mistake, you please correct me !

What you tell would be an idea to handle the chance of the short option on any day before expiry date. Nothing wrong with that.

It seems to me, and do not get angry please, that you are in no way a pro. You have a certain knowledge about how to do it, but you are a normal retail trader.

It is nothing bad about that and you please tell me if I am wrong.

There are strategies out there, which are never published by the pros about that and this is why I say you are not a pro.

Take care and maybe see you again

DanPickUp
Click to expand...
Hi Danpickup,

Thanks for your valuable inputs & feedback on my reply. I am not a valuable contributor to this forum and just an ordinary member of this forum and trying to enhance my knowledge about the stock market.

I am neither a Professional Trader nor an Expert of Call and Option domain. I regularly read your posts and admire its professionalism and completeness.

Yes, the answer of the query is in one word - "NO".

I have just tried to give some more input on short selling and could not give the complete strategy on how to trade call and options as I am not an expert of this domain. There are people in this forum and already there are threads which gives the strategy and knowledge about call and options trading.

I have a sincere suggestion for Moderator that the forum should be monitored and only complete reply with strategy and professional touch of that particular thread should be kept so that people who are using this forum can save their valuable time by reading the good posts only to enhance their knowledge instead of wasting their time in reading the un-complete, confusing or irrelevant posts which I have experience in last 3-4 years. There should be a team of experts who can go through the posts and at least on weekly basis delete the irrelevant posts.

Thanks once again for your response.
 
R

rkkarnani

Well-Known Member
#7
#7
Star Scream said:
Hi,
I needed some clarification regarding short selling of options.

When I short sell say 100 shares of a company I have to buy 100 shares of the same company before the end of trading on that day itself.

What if i short sell a call option?
Do i need to buy a call option of same expiry and strike price before the end of trading on the same day itself?

Thanks!
Click to expand...
Hi Friend,
The fact is that you DONOT need clarification regarding short selling of options!!!
Surprised!!! Well in reality you NEED clarification regarding the "DERIVATIVE" segment as a whole, not just selling options intraday!!!

Try this link, the write is simple and India Specific! It is Step by Step info about Derivatives!!!

http://tinyurl.com/czz7uk

Dan has written a very sensible reply to your post, take it seriously!!!
Now...
To answer your query directly, as already replied by a couple of other members......yes you can sell Options and need not square the position intraday!!! (In fact you can also sell the Futures derivative of the same stock and need not square that intraday too)
Selling Option has risk associated with it , requires margine. In fact its quiet risky selling Naked options.... usually people take covered positions in options or many simply Buy Options where the down side is limited to the premium paid!!! To know more about options just Google search and you will get enough material to read for a long long time!!! I would recommend that you first down load the file from above link and read it and then proceed further!!!
All the best!!!
 
R

ranj_2k

Active Member
#8
#8
DanPickUp said:
Hy ranj_2k

You are more than welcome in this forum with your ideas and personality. Wish more people would have that level.

Did you try the thread from one of my friends, AW10, about credit spread.

I have to step back at those moments, because I do not trade the Indian market. But as you already hear, even as an outsider I can profit from new statements and views in this forum.

I trade the US market in a completely different way, which most members of this forum do not have an idea. I do not care about that. People here are in general nice and many are very clever. If you have specific questions about what ever, just ask and the pros here will communicate with you, as long as you also bring in some thing.

http://www.traderji.com/options/305...ading-strategy-option-spreads.html#post333541

AW10 trades the Indian market and he, smart_trade, stockmurtaca, linkon7 and many others( sorry, do not have all of the names in my head) do option trading in a pro way.

Your idea about cleaning up some times the mess which some newbies start, is surely not a bad idea.

My experience is : Help them to find the way in the forum, even if it is some times a direct way to say : Hey open your eyes and read there and there.

Usually it helps them and it helps us not always to read new threads about the same subject.

What happen today, as some of my friends informed my, happen before and so we have to take it as usual business and go the the next more important things.

Take care and hope to see you sometimes posting and use a thanks

DanPickUp
Click to expand...

Hi Dan Pick Up,

Thanks for your motivational feedback. AW10, smart_trade, stockmurtaja, linkon7 and others are learned members of this forum and thats why I am here to look for their posts to enhance my knowledge about stock market.

Yes, I am very scrooge in giving thanks but I will take care in thanking the useful posts as well as while replying.

Thanks
 
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