When. I sell an option , I receive a premium. What happens to that if I square off my position before expiry ? For example I’ve received 10K as a premium for short straddle. Before expiry , my open p&L is 1K. now what will happen if i square it off ? would i get only 1K and have to return 10K premium … how does it works , Iam new to this so asking this basic question
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You don’t return the ₹10,000 premium; you just pay the current price of ₹9,000 to close the trade. The leftover ₹1,000 is your final profit.
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