Hi
I need a small clarification that if i buy any index/stock option and at end of the expiry if the stock goes down and the option i have bought will be a OUT OF THE MONEY OPTION for my knowledge.
Please let me know what are the uncertainties which might occur and penalty or charges i got pay .
regards
Karthik
There is no uncertainty or penalty, since the option is worthless it is expires at 0. The entire premium that you had put up will turn into a loss.
If your option expires out of the money, then it means that your option has expired moneyless and it has no value to it. There are no uncertainties that can occur in this situation and you will not be liable to pay any penalty/charges. You will only lose the entire premium amount you’ve paid for this option.
Very soon, even for options that expire in the money, you’ll have the power to decided whether you’d like to exercise the option or not. You can calculate your STT value and then take a decision based on your profitability.
Read the link below for more:
Kamathsir, sir I want to know that if i can’t squareoff my in the money option on expiry day and its ltp is rs. 2 and settelment price is 12. than in which price my option will be sols? at ltp or closing price?