Cash secured Put strategy with SILVER - MCX

Commodities
1

I am trying to execute Cash secured Put strategy for SILVER NOV options.
I understand that my Put position will devolve into futures contract.

  • As per this sheet, expiry date for options is 25th Nov 2020.
  • I am expecting that a SILVER DEC Futures contract would get credited to my account automatically on 26th Nov 2020 at 9:00 AM (opening time).
  • Now, the last trading date for SILVER DEC is 27th Nov (10 PM). Does this mean that I would have just 2 days to square-off my Futures position?

Are my assumptions correct?
Is this the ideal way to execute the Cash secured Put strategy with SILVER Options?

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2

Hi @Manpreet,

Yes, your assumption is correct.
If your PE short option is ITM and devolved and exercised, You will have a long Silver future position the next day.
You will have to square off the position on or before 27th November as the tender period for the physical delivery of Silver begins on 30th November.

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3

yes, your assumption is correct and it is the right way to execute cash secured put, with silver options.

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4

Thanks a lot @amoghrk and @Shiva

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