Help ...

#1
Hi,
Im a complt novice but I bot a call option on Aug Nifty at strike 3350. I paid 68 as premium. Now, I am confused as how I should exercise my option on expiration. Wot is the process. I am using 5paisa as my broker. Pls help.
Rgds
Rohini
 

aad

Active Member
#2
Hi,
Im a complt novice but I bot a call option on Aug Nifty at strike 3350. I paid 68 as premium. Now, I am confused as how I should exercise my option on expiration. Wot is the process. I am using 5paisa as my broker. Pls help.
Rgds
Rohini
Dear Rohini,

You can not excercise index options i.e. options based on indexes. They are called european-style options meaning they will be "marked-to-market" on the expiry date (31st August in your case). However, if you want to close your deal, you can put a sell order (similar to how you sell your stocks) i.e. square off. I dont think you will have trouble in squaring off this option as you are in the money (well... almost) and the strike price is volatile right now.

Rohini... its all your money and you have the right to decide how you want to spend it, but from this post, I am getting a feel that you invested (?) on this option with half-knowledge... or based on some collegues suggestion or whatever... Options is the most notorious in stock market... U get carried away by the propoganda that "you have a limited loss"... but what is this limit ? 100% of the amount invested ?? Can one call this an investment ? You really need to be an expert to trade in options. I hope you will take care in future.

There are plenty of books available on options (derivatives) trading. I am sure you would like to go through them before giving your next shot.

With regards,

Abhay (AAD)
 
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