If there is very rough quotation in in the money index options and we dont sqaure off buy or sell position at the time of expiry and leave it as it is, what will happen? How they settle and at which price? Please answer with an example. I have also heard that 400 time stt will be charged if we dont sqaure off in the money for any reason. Please explain with an practicle example.
this article basically explains what happens if we dont square off our position.
for example : nifty expired at 16050 and u have bought 16000 CE … as it is In the money (ITM)
you will have to pay STT on the intrinsic value (16050-16000) = 50 rs…so lets say u have 1 lot …so u have to pay STT on 50*50 = 2500 …STT would translate to 0.125% of 2500 = 3 rs
n if its OTM ,ofcourse it expires worthless…
If nifty expired 16050 and we had 16000 call, and we dont sqaure off, price of 16000 call considered as 50 rs? And in contract note we get 50 rs as sell price and for 1 lot 50 into 50 = 2500 rs as credit we receive?