If I want to buy any option today for next expiry I. E 24 april then I’m getting nudge but next expiry still has 4 trading sessions left except today.
Is it that if stock option is purchased & hold today for 17th April expiry, stock option also settles as per weekly expiry of indexes? & then final expiry of month is settled on last expiry date of month?
If you’re getting a nudge while trying to trade stock options for the 24th April expiry, it’s a reminder that stock options are physically settled on expiry if they turn in-the-money (ITM).
As the expiry date approaches, starting from E-4 day , exchanges begin applying additional physical delivery margins, which increase each day. By expiry day, the margin requirement can go up to 50% of the contract value. These margins are necessary to ensure there’s enough reserve in case you’re assigned delivery, and not maintaining them can lead to penalties. If you’d prefer to avoid physical settlement and these additional margin requirements, it’s better to trade the next expiry .
No, stock options don’t follow weekly expiry cycles like index. You can learn more about physically settled on expiry here.
