Option writing confusion can anyone help?

Hi everyone, i have a doubt, can anyone clear it? Suppose if i sell a lot of call and after few days my trade went wrong direction than can i square off my trade?

Yes you can square the trade but you may incurr a loss.

Yes, you can square-off your position.

Would suggest you to go through the following module on Varsity, it will help you understand Options better.

Hello…thanks…going through the basics of options… Qq…As per the theory , seller is obligated and only buyer is having right, then how come a seller can square off ? So seller has to wait until expiry , take premium if profit or take physical delivery in case of loss?

Even if you’re an Options seller, you can square off your position before expiry. The difference between the price at which you shorted at and your square-off price will be your P&L.

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That’s for “exercise” of the option after 3.30 of expiry date.
Before that it’s usual buy-sell kinda trading.

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you basically sell the obligation to someone else when you square off


Hi tripuri ji,

When you buy a call, the premium paid is your maximum loss n in case of call selling, risk is unlimited if it goes above but your profit is only the premium received. Coming back to your question, yes u can sqaure off anytime. If you r new do covered option strategy to limit risk or losses.

Good luck