I am beginner to F&O. I just buy one nifty call option strike price 12000 expiring on 22-feb-18 at ₹5 on nrml basis.if premium goes zero before its expiry,whether my position automatically square-off before expiry or not?
Not possible zero before expiry
If your strike price is out of the money then no need to square off
Theoretically - NO, because (1) there is always some time decay value available, and (2) no exchange would ever execute a trade at zero price.
But in reality - there can be other conditions making your position illiquid and non-tradable.
Like, if you are having a OTM position which is no longer traded in the market, you will find no buyers/sellers, and you may be stuck with that.
Minimum Last traded price will be 5 paise
Stuck with that means what will happen after the day closes?