Option till expiry

Zerodha
1

Hi

I am using Zerodha.

Example:
I bought NIFTY50 - CE or PE for premium Rs. 100, 20 days before monthly expiry.

Total amount deducted from account (75 qty X Rs. 100) = Rs. 7,500

10 days before monthly expiry, premium reached my target.

  1. If there is no counter party, how can I exit my trade?

  2. Can I hold the trade till expiry day without any additional payment?
    I have seen one video that, from last week of expiry, some % of spot price to be maintained to continue the trade.
    10% on Exp - 4 day
    30% on Exp - 3 day
    50% on Exp - 2 day
    70% on Exp - 1 day
    100% on Exp day

What will be the scenario for stock option?

Kindly explain.

2

If there are no sellers, then you won’t be able to square-off your position and will have to hold on until expiry.

Index Options are cash settled, so there is no requirement for any additional margins. This is applicable only for Stock Options, which are physically settled.

For Stock Option, if your position is ITM, the exchange blocks physical delivery margin in phased manner from expiry minus 4 days.

If the position expires ITM, you will have to take delivery of underlying shares (Long Call) or give delivery of underlying shares (Long Put). You can learn more on physical settlement process here.

3

What will happen, If I don’t find counter party, Till expiry day also,

Thank you

4

If you’re not able to square-off the position by expiry day and if it is ITM (In the money), it will be settled by the exchange. While if the option is OTM (Out of the money) it will expire worthless.

5

Thank you

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