Hi team,
I have doubt, for example i have buy option DRREDDY Aug 1000 pe need to sell this option, but it’s trading at 0.05 and there is no buyer available to buy only seller only available. So how to settlement will happen. Plz help me out in detail
If no buyer is willing to buy, your order will remain open.
Remain open ok, so them what is procedure for the next step how they settlement will happen on expiry 25-Aug. We need buy the stock on the settlement or cash settlement will happen. Plz explain in detail
If the strike stays OTM, it will expire worthless and there will be no physical delivery obligation. If it turns ITM and there is no liquidity to exit, it can result in a physical delivery obligation.
You can buy the stock on expiry day, which will be netted off against the delivery obligation. Alternatively, buying the corresponding futures position should also work. With CAS, you get an additional 10 minutes after the closing price is determined, so you can assess whether the option has turned ITM and take action accordingly.