Hi, what will happen for the below situations given , ( all are just examples , not real values )
i think one stock will rise from here CMP is 90
if i sell one 100 PE strike at premium Rs.10 and with buy 90 PE strike at premium Rs.8.
if the stock cross abv 100 at expiry or before , i will get 2 Rs profit ,and both the PE values will be zero , ie .05 paise
what if there is no buyer at expiry end ? how will i square of my PE bought and PE sold ?
will any extra stt for that PE sold ?
Hi… First of all 90 pe will cost more than 100 pe as cmp is 90 as u said… So 90 pe at 8 and 100 pe at 10 is not possible at same time… Still Assuming u cud somehow manage this in someday… as price is abv 100 at expiry no stt (applicable only on unsold ‘in the money options’) on the 90 pe which was bought but wud expire worthless . On 100 pe which is sold, stt is paid at d time of selling itself…
In short u cud manage to pocket 2 rs diff… 