Hi, I would like to know what happens if there is lower circuit on expiry day and i had puts bought
You can exit the puts on profit, whats the problem?
Which stock?
in bank index, suppose there is lower limit circuit and markets are closed for trading in that case what happens?
in bank index puts, suppose there is lower limit circuit and markets are closed for trading in that case what happens?
on expiry day
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You mean LC on the put you’re holding?
Options is like you’re own property. Unless you short sell, you don’t have any obligation to do the opposite trade. If you’re put value hits the LC, then you let that expire. max loss is buying price.
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I mean to say if market crashes on expiry day and its closed my bank nifty puts index level around 1000 points down and market is closed for trading
eg i had bought 25000 PE expiry for tomorrow and markets crashes tomorrow and is closed for trading till 3.30 and last trading banking level was 24000.
in that how its settled?
sir your question is confusing. Whatever reason if u don’t square off a put option buy , then either it will get exercised or expire worthless
If 25000 put and spot closes 24000 then your put option will get exercised. This case is deep ITM so even after STT and other charges u will get net profit
Market crash is usual but trade halt is not. So don’t bring trade stopping into the equation.
NSE may extend trading hours if trading halt is there for some reason, unless something very severe has happened. If final settlement price is 24000, then 25000PE option becomes In-the-money (ITM) for 1000 points, and your (buyer’s) profit will be 1000x25 = 25000 Rs. Your 25000 profit is 25k loss for the option seller.
Please watch my video on ITM / OTM / ATM- 3 ITM ATM OTM In-The-Money, At-The-Money, Out-The-Money Explained Zerodha NSE Option Chain Analysis - YouTube
Exit the puts on profit, you can either short sell or let it expire. Check market hours and news and decide what may be the best option for you, it’s a more on the spot decision.