I have a little query, can you please help me with this.
I have bought NAVINFLUOR 3600 CE at 163 I have sold NAVINFLUOR 3750 CE at 100 I have sold NAVINFLUOR 3900 CE at 56 and I have sold NAVINFLUOR 4000 PE at 44 3600CE and 3750CE call have become illiquid. Price of NavinFluor as of now is 4020.
I just have a little query, what will happen in physical settlement if NavinFluor closes at 4000+ on the day of expiry ?
Will these four options result in a net off or there be any penalty ?
If Navin Flourine closes above 4000 in expiry day, your Long 3600 CE and Short 3750 CE and Short 3900 CE will expire ITM, while Short 4000 PE will expire worthless.
Long 3600 CE and Short 3750 will be netted-off, but you will have to give delivery for Short 3900 CE as there is no offsetting position. You can learn more on physical settlement here:
Thank you sir for the information.
Just one more question sir, what if Navin Fluor closes between 3900-4000, will both Short 3900 CE and 4000 PE will net-off ??
Yes, if Navin Flourine closes between 3900 - 4000, say at 3950, both 3900 CE and 4000 PE will be ITM and obligation will be netted-off.
One last query sir, for long 3600 CE and short 3750 CE of navin fluorine(4080 right now), at the time of net off, what will be the charges, and will I get the profit, that is happening with these 2 calls ?