Futures and options 2

[suri]

What happens if you buy a call option and don’t sell it?

[ShubhS9]

Answered here

What happens if I don't square off my positions in options?

Index Options (Nifty and Bank Nifty, Nifty Financial Services) are cash-settled. If your Option expires OTM, it expires worthless. ITM Options are settled at their Intrinsic Value. And depending on your Profit/Loss money will be credited to / debited from your account. Also, if your Long Option position expires ITM, exchange will levy STT at 0.125% on the intrinsic value. There will be no STT on the Short position as STT is already paid when you sell the option. More details here: Sto…

[suri]

Ok ,stock option will be physically settled what about the Nifty index options?.

[ShubhS9]

@suri

stock option will be physically settled what about the Nifty index options?.

Index Options (Nifty and Bank Nifty) are cash settled.

[suri]

So future and option is a zero sum game. The person who has bought the call option has not sold so the person who has sold the call option would not have received this option back so the final settlement credit or debit it is done by the final remaining seller.