Priyanvada's chit chat home ...

[rajeshn2007]

Smart Tiger Sir that American options can be cash settled ... this is my probably first time to cash settle option, so I am nervous ... not knowing what to do??? My brother's account on which I play is in share khan...

You can exercise the option after market hours.
say HH closes at 1610, the difference amount between the closing price and the strike price would be your selling price. (even if there are no buyers)

 

[prasadam]

cash settling will come into picture only when your option is in the cash that is above 1590. which I think is unlikely, because the fast action of the price may not give you a such chance.

any how ask sharekhan people, they are better placed to give you correct picture.


cheers

 

[priyanvada]

You can exercise the option after market hours.
say HH closes at 1610, the difference amount between the closing price and the strike price would be your selling price. (even if there are no buyers)

1. Can it not be exercised in the same way during market hours, with
Current bid price as selling price?

2. In an exercise happening at after market hours do I need any capital or I will be given the cash difference directly?

 

[rajeshn2007]

1. Can it not be exercised in the same way during market hours, with
Current bid price as selling price?

2. In an exercise happening at after market hours do I need any capital or I will be given the cash difference directly?

1. No. only after market hours and also exercise can be done only if the current price is above your strike price (1590, I hope)
2.you are seller , so you don't need capital, you will be given the cash.
say if it closed at 1610 means 20*lotsize

 

[priyanvada]

Thanks Rajesh!

 

[rajeshn2007]

Interesting quote:

"I guess I should warn you: If I turn out to be particularly clear, you've probably misunderstood what I said." - Alan Greenspan

 

[priyanvada]

Interesting quote:

"I guess I should warn you: If I turn out to be particularly clear, you've probably misunderstood what I said." - Alan Greenspan

........Context???

 

[rajeshn2007]

Nothing in particular context.

 

[priyanvada]

Nothing in particular context.

...mmm? .....Just a mind-twister then!

 

[priyanvada]

Here's mine favorite one ...

Chuang Tzu once saw a dream that he has become a butterfly. And in the morning he was sad. And his disciples asked, "Why are you so sad?" Chuang Tzu said, "I am in trouble. In such a trouble I have never been before. This puzzle seems to be impossible; it cannot be solved. Last night I saw a dream that I have become a butterfly!"

The disciples laughed. They said, "What is there? This is not a riddle. A dream is just a dream." Chuang Tzu says, "But listen. I am troubled. If Chuang Tzu can dream that he has become a butterfly, a butterfly may be dreaming now that she has become Chuang Tzu. So how to decide whether I am now facing reality or again a dream? And if Chuang Tzu can become a butterfly, why can't a butterfly dream that she has become a Chuang Tzu?"