Suppose I have shorted a call option of a stock at strike price of 100. At the time of expiry, stock price is 100.05. Still, will be considered as ITM option?
At what time does the expiry takes place on date of expiry? Is it at 3.30 p.m. only? What happens if there are any bulk deals in that stock post in market session, which causes the stock to close at a much higher or much lower price. Will it change the ITM or OTM nature of my shorted option after 3.30 pm?
The Option will expire CTM. In such case, the exchange will do random assignment. In the event that your option contract does not get assigned, you are entitled to retain the premium. However, if an option gets assigned to you, you will have to give/receive delivery of stocks depending on whether you have written a call/put option. You can learn more about physical settlement here.
The underlying price you see at 3:30 PM is LTP (Last Traded Price), the final closing price is weighted average price of last 30 of trading, this is updated after the market closes. The settlement will happen according to this price.