Can someone please clarify me that if options are european on NSE, then what is the benefit of writing options if position goes against you and we are not able to close it due to european options?

If position goes against you, you can square off your option at whatever market available premium price.

When you buy options you buy paying a premium price.

Similar to equity market, if position goes against you, you can sell off that option at higher premium price available in the market. All you have to do is choose the same option in your market watch and initiate a sell command.

This will nullify your option position and you need not wait until the expiry date for exercising.

(Technically you can think of as while selling the option, you are transferring your risk to someone else, who is willing to take that risk, that your right for exercising is sold to that person, he will either wait until expiry to exercise it or he can again sell off his option and transfer the rights to someone else, like you did. The person who is finally holding the position will have the right to exercise the option and get his settlement)

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When the exchange mentions that the Options are European, it means that u can ‘Exercise’ the option on the expiry day. The meaning of ‘Exercising’ an option is different than the meaning of ‘Closing’ an option. Please do-not consider both of them as same. You can Close an option position any time if liquidity exists.

PS:The concept of Derivatives(F&O) trading was designed basically for the Physical Commodities(corn, soya etc) long back and later extended to different underlyings(index, stocks etc). The word exercise makes more sense for the physical commodities as it means that you can take home the derivative position, if you want to, only on the expiry day. The exercise of other underlyings(stock, index, etc) is by cash settlement on the expiry day in India.

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Nice one! Well explained