need help in option(fno)!

[Trader07]

Hi Rahul,

Yes, you can square off your 'buy' positions before expiry.

 

[amit_shriv]

Hi All,
as I am also new inthis field of options:

please advice am asking the same question:

Question 1-Suppose I buy a niffty call(CA) today can i sell it tomorrow??

question 2- suppose i buy a niffty put(PE) today shall i square off tomorrow??

or shall i have to hold it till expiry:

Second query:
if i buy a put and sell it off tomorrow will it be considered as two open positions in the market because it has not reached its expiry date.

I request you all investors to clarify the details : can we or can we not..

all comments are welcomed...

thanx

regards,

rahul_trader

I will try to answer you question:
Answer to question 1 and 2 is YES.
or shall i have to hold it till expiry: This totally depends on you. Whether you want to hold till expiry or square off you position any time till expiry.

Second query:
if i buy a put and sell it off tomorrow will it be considered as two open positions in the market because it has not reached its expiry date.
This will not be considered as two position. You net position is ZERO. meaning your postion is closed. You can square off you position any time on or before expiry.

 

[narayan78]

thAnks for seniors and juniors for helping out


i used to buy share (scripts) and then sell it off . i am alowed to go short in certain scripts. But i have to squre it off the same day.

i just went through a option guide it's giving different strategies. from that i came to know that.

1. we can buy a CALL OPTION.(CONTRACT PERIOD DEFINED)

2. we can SELL a CALL OPTION.(?)

3. WE CAN BUY A PUT OPTION.(CONTRACT PEIROD DEFINED)

4. WE CAN SELL A PUT OPTION.(?)

WHAT I WANTED TO KNOW, IF I SELL A CALL OR PUT I HAVE TO SQUARE IT OFF ON SAME DAY OR CAN I ALLOWED HOLD IT TILL THE EXPIRY.


my second question

index options are european in nature

but how nifty can be sold before expiry.sqare off is possible !

cheers for ur help

 

[rahul_trader]

Thank u for your prompt replies Amit and Trader07.

As told by Narayan78 am also confused about that Index such has Niffty are European so is it possible to sell them off the very next day........if we do it won't it be considered as two open positons....pls clarify..

comments are a welcome from all members pls

Thanx
Rahu

 

[amit_shriv]

WHAT I WANTED TO KNOW, IF I SELL A CALL OR PUT I HAVE TO SQUARE IT OFF ON SAME DAY OR CAN I ALLOWED HOLD IT TILL THE EXPIRY.


my second question

index options are european in nature

but how nifty can be sold before expiry.sqare off is possible !

cheers for ur help

The answer to first question is You can square off option any time on or before expiry (same day, next day...on or before expiry) or you can hold till expiry.

Second: Nifty Index Option is european in nature ..you can Square off postion any time on or before expiry but you can not exercise the European option before expiry.
Only American option are allowed to execise any time befor expiry.

 

[amit_shriv]

Thank u for your prompt replies Amit and Trader07.

As told by Narayan78 am also confused about that Index such has Niffty are European so is it possible to sell them off the very next day........if we do it won't it be considered as two open positons....pls clarify..

comments are a welcome from all members pls

Thanx
Rahu

You are wlecome.
Yes it is possible to sell them off very next day but you can not excercise the europena option before expiry.

Don't get confuse between SQUARE OFF and EXECRCISE

Squaring off is placing the opposite order to the position you currently hold. Suppose you are a call holder of 100 HLL contracts then you square off your position by shorting 100 HLL calls on the current market price.


On the expiration day T, the net position is calculated.

Your net position works out to be zero (100 buy calls - 100 sell calls).

The only gain/loss from the transaction is the difference in the premiums paid.
Exercise of an option contract is exercising your right to buy the security in the case of call or sale of the security in the case of a put. In India, the exercise results in cash settlement of the difference between the strike price as appearing in the contract and the spot price as on the exercise date.

 

[rahul_trader]

Thank you for a quick answer..If am not confused then let me know am right
in this manner: suppose

I buy a niffty call today and if i sell this niffty call tomorrow
will this position be considered as closed or

it will be considered as two open position till expiry

Buy niffty call and selling niffty call

as far as stocks are considered I can do this according to you I checked with other people and u are rigth but what about Niffty options does this work out in Niffty also.

Every body please comment on this...........

Thanx
Rahul

 

[vince]

You can sell a nifty call/put option any time after purchase. The position will be considered closed or squared off assuming it is the same strike and same series

 

[amit_shriv]

Thank you for a quick answer..If am not confused then let me know am right
in this manner: suppose

I buy a niffty call today and if i sell this niffty call tomorrow
will this position be considered as closed or

it will be considered as two open position till expiry

Buy niffty call and selling niffty call

as far as stocks are considered I can do this according to you I checked with other people and u are rigth but what about Niffty options does this work out in Niffty also.

Every body please comment on this...........

Thanx
Rahul

If you buy Nifty call of strike price X and sell Nifty call of same striek price X tomorrow, the position will be condidered as Closed. Net position in market is zero.

 

[narayan78]

hi juniors and seniors thanks for u r help!


if u don't mind can u explain

(i) squaring off an index(NIFTY) option with example.

(ii) excersing an index (NIFTY)option with example.

the major difference between them.

advance thanks for u