What if the closing price of the underlying is equal to the strike price of that underlying stock. Then CE and PE of that stock will be considered ITM or OTM, i.e., will they get exercised or not.
For example, today IDFC closed at Rs. 58.00. So, 58 CE and PE will be considered ITM or OTM?
They are considered ATM. Intrinsic value of those options will be zero and the time value is also zero at expiry.
Hi i have a query on F&O trading. i had brought out of the money call option of ICICI Lombard General Insurance Company Limited and Bharti Airtel Limited. the option position went in loss and i squared off the position 2 days before 25 Jan 2023 expiry. if i dont click the square off button and let the position continue to expire is it the same as option position maximum loss ?
Yes, as you are option buyer, if the option expires OTM, your loss is limited to the premium paid. You can learn more about options trading on this Varsity module: