I have a bullish view in TATA steel so I deployed put spread in current month expiration I sold ATM option and bought OTM option. 1)Now let’s assume that TATA steel stock goes opposite of my direction and then both the options goes ITM. Before expiry I just can’t exit the trades because of High BID/ASK spread. Will the physical settlement will happen? Or they will cancel out each other since both are ITM? and it will be cash settled.
At what prices will my long option will get executed after expiration? LTP or BID ASK rate?
If the OTM option which I bought goes ATM and the ATM option which I shorted goes ITM will the Physical settlement take place of ITM put option which I sold in expiration?
4)If I don’t exit my credit spreads trades in last 2 days will there by any hike in margin requirement?