What will happen if Deep ITM option exercised due to liquidity problem?
Suppose I buy deep ITM Call option of March expiry of a Stock which is not in the physical delivery list (say Ashok Leyland or Yes Bank). Current stock price is 85 and DITM option Strick Price is 65. Are all the below points correct, considering stock price will go up till 95.
Call option premium will also increase to around 30 (95 - 65) considering stock closed at 95 on expiry and DITM Strick Price Delta above 0.9.
STT will be on the entire contract value.
(4000 + 65) * 30 * 0.125 = 15,243/-
Profit will be Lot Size * (Current Premium - Premium Paid) - STT i.e. 4000 * (30 - 15) - 15243 = 44,757/-