how call and put is exercised after expiry.

#1
If we have stock of reliance 500 shares and we sold call of reliance at strike price of 1500. and reliance closed at Rs. 1515 at end of expiry.
so now my call is ITM, and If do not squared off reliance call of strike price 1500 till expiry.

Now I wanted to know it is clearing house is settled but from below options, how they settled.
i) it is settled like my reliance stock of 500 shares will be debited from demat account and I got amount of INR 1500*500 in my ledger.
ii) or it is settled like clearing house will buy back reliance 1500 strike price call at a cost of Rs. 15.
 

Vmaster369

Active Member
#2
it;s cash settled
meaning if it;s option you either leave it to go zero worthless or if u are in winning Profit be auto credited to account if u don;t square off (offcourse broker will charge u heavy brokerage since they settling and u not square off.)so best is to square off [I say don;t play option play Equity]

and condition u mentioned is true for futures.
in futures if u buy and want delivery u can request that to broker on expiry date paying full money for quantity. most 99.9999% are cash settled as per spot price
 

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