I have very far otm 20% away shorted CE and the liquidity is very low to close the position(buy back). As these are OTM I can let them expire but on the expiry day the margin required increases exponentially even if the positions are OTM. Can someone please help how to deal with this?
Thank you!
Hy @Rails_Playground
You can basically hedge your position by buying (going long) on nearby CE option.
Thank you @KarthikAcharya yes its an option but I am wondering on the implications on expiry. The strikes before my strikes are available at a lower price and has liquidity.
Hy @Rails_Playground
Can you elaborate on your query probably with an example? 