Call option Sell query

I have sold one lot (3000 shares ) of Ambuja cement today at 19.00. I understand I will receive the premium tomorrow. Can I exit the position tomorrow? What happens if the stock goes down tomorrow. Is the premium the only profit I make.

Yes, you can exit your position tomorrow.

If stock goes down, your Short Call position will be in profit. The difference between the price at which you took position - the price at which you square-off your position will be your profit.

Also, Option sellers profit is limited to premium received, while loss can be undefined.

Even if it is a ITM call option? My strike price is 250.

Option prices fluctuate according to movement in underlying prices, if stock moves down your Short Call Option starts losing its value and your position starts making profit.

It’s going ex-dividend tomorrow. Will the price go down on ex-dividend day?

Hi Shubh
Any update?

When stock goes ex-dividend, the price of stock will correct to the extent of dividend paid, also the F&O price, quantity, strike price too gets adjusted accordingly. You can check this for more information.

1 Like