what happens when i buy 1000 lots of banknifty at 0.05 hoping that i will sell them at 0.1 but unable to square it off before it expires?
Hi @Yash_Patel
In options trading buying at 0.05 on expiry and selling at .1 which is the minimum spread found in options. To make profit the market should close above your strike price if u took CE. Then u get to keep the premium which will be the difference between strikeprice and market closing price . If market closes below or exactly near to strike price then OTM and ATM options are found to be zero . But trading with huge quantity, if exercised then STT will be .125%.
friend,
the it can be done, but the risk factor is that mostly all of the time, buyer are not available at the time of expiry, so if you want to give it a try first try with minimum qty than slowly increase that but never over position yourself, as if the buyers are not available at your selling price your capital will be wiped out.
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