let’s say current reliance price is 2300. we buy 2300 ce 1 lot(505 shares). hoping price to reach 2400. price does reach 2400.
so if we want to take full advantage and we have to take delivery and buy 505 shares at 2400 to get 50k?
otherwise if we don’t take delivery and choose not to exercise our option, we make only the money on premium. that is we bough 1 lot 2300 ce at 70 premium and the premium becomes let’s say 90 when reliance stocks reach 2400. so we make only 20*505=10k instead of if we take delivery of all 505 shares at 2300 which gives a profit of 50k
Do we also need to have 12 lakhs in margin(505*2400) to exercise our option?
Thanks for taking the time to read and answer. much appreciate it. new to trading options