How to settle Options?

[marcus]

yes you can find it for any past date on nse website yes the premiums fluctuate intraday

 

[dr_tejas_shah]

yes you can find it for any past date on nse website yes the premiums fluctuate intraday

Thanks Marcus.

Just like intraday trading, since the premium fluctuates, a trader has to be glued to the screen to get the best possible premium in option trading.

 

[marcus]

yes dr shah if you intend to day trade

 

[rajsingh]

hello all...

plz help me with my query... i had bought nifty call option... is it necessary to square it off? or can i not excersise it? i mean if i square it off then i have to pay brokerage... and any way im in loss and it is trading at Re 1/- . so wht should i do... plz reply... i am using sharekhan broker
thanks

U can just let it expire. Do nothing.

 

[skinvest]

hi,
I have read the complete thread and thanks for ranj and all for the best thread which explains options.

I am very new to options infact after reading a lot i have taken a first call option on reliance of 2500@173 for 25-May-2008. I have read through the thread but still needs confirmation on some points with respect to ICICIDIRECT and stock option....

1. if i do not square off or excerise my option will it be excerised atoumatically by exchange or ICICIDIRECT on expiration date of course if my option is in-money.(if i do not login)
2. in-money will be spot price > my price 2500+173= 2673
3. in that case what amount will be credited to my account
for eg spot price at 25-may = 2700 so 2700-2673 = 27*lot size(75) = 2025
why i am asking this question as there is no trade going on at times at this price and so it is diffcult to square off or excerise.
4. If i excerise my option in between or on last day then do i have to buy all the share by paying all the money or only the difference is credited/debited to my account.

with this i understand that you answer this question as i am very new and i will be always thankful to all.
Please answer all the question as it will decide my next step...

thanks a lot again

 

[rkkarnani]

hi,
I have read the complete thread and thanks for ranj and all for the best thread which explains options.

I am very new to options infact after reading a lot i have taken a first call option on reliance of 2500@173 for 25-May-2008. I have read through the thread but still needs confirmation on some points with respect to ICICIDIRECT and stock option....

1. if i do not square off or excerise my option will it be excerised atoumatically by exchange or ICICIDIRECT on expiration date of course if my option is in-money.(if i do not login)
2. in-money will be spot price > my price 2500+173= 2673
3. in that case what amount will be credited to my account
for eg spot price at 25-may = 2700 so 2700-2673 = 27*lot size(75) = 2025
why i am asking this question as there is no trade going on at times at this price and so it is diffcult to square off or excerise.
4. If i excerise my option in between or on last day then do i have to buy all the share by paying all the money or only the difference is credited/debited to my account.

with this i understand that you answer this question as i am very new and i will be always thankful to all.
Please answer all the question as it will decide my next step...

thanks a lot again

Here in India we are still in settling the Options or Futures in Cash only. There is no need to Buy any shares or sell any shares even if you are holding a Call or a Put on the last day.
The options which end in the money get the difference in Cash. In case of ICICI or for that matter any platform, The reffered Call option of Reliance if the underlying closes above 2500, let us assume it closes 2590, you will get a credit of 2590 less 2500 i.e. 90/- per share of reliance. So you loose 173 less 90 i.e. 83 per share. You stand to gain only when relaince closes above 2500+173=2673. Reliance closing below 2673 does not mean you loose the entire sum of premium paid by you.
You get anything over and above the strike price.
Hope have been able to answer your query.

 

[skinvest]

Thanks for the immediate reply. This thread is really good.....

 

[sanjugalande]

hi i read all posts but not getting ans of---

2. if i sell far OTM call (CA) and did'nt buy it on expairyday(since underlying remain far OTM) what will happen...as i a;ready earned primium by writing
3. on xpairy day for my farOTM call(which already sold) has no buyers


thanks
sanju!

 

[rkkarnani]

hi i read all posts but not getting ans of---

2. if i sell far OTM call (CA) and did'nt buy it on expairyday(since underlying remain far OTM) what will happen...as i a;ready earned primium by writing
3. on xpairy day for my farOTM call(which already sold) has no buyers


thanks
sanju!

Yes, you retain the premum you have earned by writing the Call!!!! It will expire worthless. You should not be concerned about availibility of Buyers on expiry day. You are not there to SELL any more. You need not do any thing if the call remains Far Out of money on expiry day. The system will square al out of money positions 'worthless'.

 

[sanjugalande]

thanks dear

FOR OTM options:

it means if i sell call of say nifty6200 at 50 RS
at the xpairy value of call is 1RS ...inthis i forget to buy call ...system(exchange or broker?) will automatically buy call at 1Rs ...so i hve profit of 49 rite na?

and if there is no seller i e-njoyed all 50 bucks ....?