Bank Nifty option expire

#1

Today i buy option call at the cost of 60 and the strick price is 31500 and it expire today. Market close 31534 the current premium is 16.55(which is in the money).

And, I have not sell the position

Now in this scenario how loss I have to bare?

#2

Option got exercised in ur case.

STT is 0.125 percent of 31534 X20 is Rs 788

In that ur exercise profit 680 ( 34 x30 ) will be adjusted i believe

@siva please correct me if wrong.

#3

thank you for your reply

@ksksat why 34*30?

#4

He is in loss right?

#5

If his profit his less than STT i.e. if he is in loss, option won’t be exercised by broker

#6

@dheeraj how do I calculate profit?

16.55*20 = 331 (current premium 16.55)

or

60-16.55= 43.55 *20 = 869 (current loss)

#7

If STT is greater than profit we don’t let it exercise only.

#8

@siva am I right?

STT calculation 31537.10 *20 = 630742

0.125% on 630742 = 788.4275

Intrinsic value: 37.10 * 20 = 742 (profit)

Here, Intrinsic value profit < STT

742 < 788.4275

It mean my contract won’t be exercise by broker.

Net loss is 1200 /-

#9

For exercised options, STT = .125 % ((Strike+ premium) * lot size).

Also if STT > profit, we don’t exercise it, so no STT. His loss will be all his premium( price he bought that option).

1 Like
#10

I assumed it ended as 31534… But X 20

Sorry. 34 X 20

@siva.
But in this if system auto ignored as STT more . he lost entire premium. If exercised atlesst he would have lost STT MINUS exercise profit right?

#11

Only ignored if STT> premium, please go through the thread.

#12

@mrabrar14 @nithin @siva my doubt is if we exercised his call option atleast he would have lost profit minus STT

But now entire 1200 premium is lost

I agree in bigger lot sizes STT loss will far outbeat but here in one lot it is clear exercise is better?

I thought trader has to use don’t exercise explicitly?

#13

@siva here STT is 788. Premium is 1200.

STT lesser than premium
So letting this option exercised will at least adjust the intrinsic value profit

So here his option is exercised right?

#14

Exercised and he will make the difference.

#15

@mrabrar14 congratulations u are not going to lose entire premium.

As u made a intrinsic value profit that will be adjusted in STT of 788.

Balance amount only u have to pay. Please read contract note and tell us.

In ur case exercise is better than worthless expiry but this will not be the case if lot size is huge.

Last but not least don’t play expiry day game unless u r exp thorough in options space. Today ur lot size is low. What if u took many lots and somehow not exercise did not work?

#16

@mrabrar14 please tell us wat is coming in contract note

We did lot of math and clarifications , we want to cross check final value pls

#17

@ksksat 60*20 =1200 i lost full premium because profit is less then STT

in my contract full premium amount deducted

#18

@nithin @siva in this case Premium is 1200. And STT is 788.

STT less than premium. Hence we have to adjust the exercised profit and deduct only remaining STT right? Please clarify.

#19

@ksksat @dheeraj @siva @Newbie420 @nithin

Due to this mechanism it save me from paying 788

#20

@mrabrar14 @ksksat I don’t think it has anything to do with price of premium. It is just the calculation of intrinsic value that matters. If profit form intrinsic value is more than STT then it is excercised else you lose premium