I have open position in Stock Option, What happen if i am not able to exit that position bcoz of liqty issue?
HINDCOPPER146CENOV, BUYING PRICE = 5 , QTY = 5300 , OPTION CURRENT PRICE = 15.60, STOCK PRICE = 161,
THERE IS NO LIQIDITY IN THAT STRIKE PRICE, IF THERE NO LIIDITY TILL EXPIRE WHAT WILL HAPPEN IN THIS SENARIO?
As this is an In-The-Money (ITM) contract, should it remain ITM at expiry, and if you are unable to exit the position, you’ll be required to take delivery of the stocks i.e. the contract will be settled physically.
You can check on this link to know more about physical settlement.
now a days algos buys options at discount almost instantly. if you sell slightly below int+time value comparing to its future price some algo will pick it off you.
recent example: 2 month ago i had some lupin 980ce, i was holding 100% open interest on that strike. when lupin reach 1160 there was no buyers in market depth, i placed that CE for 1rs discount to future price, it was sold instantly.
Sell it to me at 14. I will buy. 