Hello ,
Could you please help me understand whether all Nifty Call Put options of a certain Month will be turned ZERO on the expiry date or not ?
Regards!
Not all!
All the Call and Put options come with a strike price.
On expiry, all Call options whose strike price is above the closing price of the underlying will be turned Zero. When the strike price is below, then the option will be settled at Closing Price - Strike Price.
For example, if the closing price of Nifty on expiry is 5137, then all Call options with strikes above 5137, ie starting from 5200 and above will be settled at zero. Call option 5100 strike will be settled at 37, 5000 at 137 and so on.
All Put options whose strike price is below the closing price of the underlying will be turned to Zero. When the strike price is above, then the option will be settled at Strike Price - Closing Price.