I had read the thread 'Query regarding Square off' in that page 3 'ivanboesky' has written that
"Exercise happens at the end of day price. So better to wait till market closing to decide if you want to exercise or not.
Only in-the-money options can be exercised. So if you exercise at 11am and the stock tanks post that, you will not face a loss. Remember, only option buyers can exercise, and their max loss is limited to the premium paid."
I have bought Polaris CE 200 (strike price) at premium of Rs.6 (on 19th apr.) lot size=1400 (expiring 26th apr.)
today polaris shares were-
from 10-11 AM trading between Rs. 201.50-206
from 12AM-1 PM trading between Rs. 202-203
from 2:30-3:30 PM trading between Rs. 198-200
polaris closed at Rs. 198.45.
so what i think is, if i had exercised the options between 10-11 AM i would have lost the whole premium. but ivanboesky's (i know he is quite senior than me in options trading ) statement is confusing me. plz, some1 help it would be good if ivanboesky answers himself. I m really confused.
"Exercise happens at the end of day price. So better to wait till market closing to decide if you want to exercise or not.
Only in-the-money options can be exercised. So if you exercise at 11am and the stock tanks post that, you will not face a loss. Remember, only option buyers can exercise, and their max loss is limited to the premium paid."
I have bought Polaris CE 200 (strike price) at premium of Rs.6 (on 19th apr.) lot size=1400 (expiring 26th apr.)
today polaris shares were-
from 10-11 AM trading between Rs. 201.50-206
from 12AM-1 PM trading between Rs. 202-203
from 2:30-3:30 PM trading between Rs. 198-200
polaris closed at Rs. 198.45.
so what i think is, if i had exercised the options between 10-11 AM i would have lost the whole premium. but ivanboesky's (i know he is quite senior than me in options trading ) statement is confusing me. plz, some1 help it would be good if ivanboesky answers himself. I m really confused.