Question on Options Square Off

Dear All,

My Question is, If "squaring off" call means selling a call with same strike price or strike price is not mattered while squaring off.

If yes how profit or loss it is calculated....

What if while squaring off no buyer is there for the said strike price and options goes to expiry date.

What happens if call is ITM on close of expiry date

What happens if the call is not ITM on close of expiry date

How the calculations are made. Do i need to pay the whole contract value amount and get the underlying shares delivery or forced square off is done by the exchange.


Regards,

Amit Jog

Squaring off means selling a buy position or buying a sell position for the same strike price.

No delivery on options market yet... broker will settle the difference on the expiry date.

My Question is, If "squaring off" call means selling a call with same strike price or strike price is not mattered while squaring off.

Strike Price is what matters while squaring off your position.. If your Strike Price is less than Underlying stock price, Your option is In The Money ( ITM ) in case of CALL.. Since, you are in profit, you'll square off your position. It means you are transferring your option rights to your buyer.. The price difference is your profit.. Simply, you are terminating the trade.. Don't confuse it with selling another call of same SP.. That is entirely different area..

If yes how profit or loss it is calculated..

Difference between the premium you paid while Buying and Selling..

What if while squaring off no buyer is there for the said strike price and options goes to expiry date.

Since, we are the buyer we have the right to Exercise the option.. So, if our option is in, ITM, the seller will give the Money..!!

What happens if call is ITM on close of expiry date

As mentioned above..

What happens if the call is not ITM on close of expiry date

The option will expire worthless.. The bad face of option..:annoyed: If the option is in ATM, calculate whether exercising will fetch you some money greater than paying brokerages and Taxes.. ( I'm not sure of this point.. Kindly clarify with your broker for exercising charges and taxes..)

How the calculations are made. Do i need to pay the whole contract value amount and get the underlying shares delivery or forced square off is done by the exchange.

Hope you are in India.. Here, the settlement will be done in cash..

Think, I've helped you rather than ing you more..

Thank You..

Note : I'm also new to options and I'm in learning phase.. I may be wrong at some places.. Kindly correct me if I've made any mistake in the post..

Gdraj,

Thanks your detailed explaination. not confused anymore..

thanks a ton

:clapping::clapping:

Amit