I have written a 1280 hdfc sept put and bought a 1160 hdfc sept put.
Now on expiry day, if hdfc is at 1150,
would it make sense to
a) let both options expire, and pay 120*250 = 30000
b) or should i square off both options on expiry day?
What should I do - a) or b)
hie one option was deep in the money it should be executed before expiry time . the other was ATM option if it stays there no problem if u didn’t even square the order . but Deep ITM should be squaredoff before expiry time . i dont know the exact executed prices . but as of my knowledge in the money options to be settled before expiry time . sorry if it doesnt have volume . then exchange will setttle it
In first case you have written the option and it has become in the money, if you does not want to buy and let it settled on expiry date , there will be not stt charged because you have written the option but in second case you have bought the option first, so it is better to sell it , letting it setle automatically on expiry date invites stt and in second case your profit will be hugely impacted