Query on option selling

Currently tatasteel 370CE value is around 4Rs. If I sell the option assuming that the price will never reach 370 by end of this expiry , will I be getting 4*lot size. If not how is it.

Yes, you will get 4 * Lot Size (- Brokerage and other charges).

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Thank you !!

I hope you are aware that Stock Options are Physically Settled, in case your Short CE expires ITM you are obliged to give delivery of shares. You can read more here.

Yes… I have a another question.
So it is always safe to sell the options with strike price which are far away from the CMP? Though I am okay with less premium. I know there is risk if the price goes above it.

Nothing is always safe, Though less but there are always chances of price making a wild move against your position. Since Shorting options carries unlimited risk, to protect you in case of such events you can consider hedging short position by buying Call option few strikes farther away from your Short strike.

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Okay Sir. Thank you for your answers!!

So you mean to say, short 370CE(4Rs) and buy 400CE (1.5RS). The maximum profit if stock closes below 370 is limited to (4-1.5)*lot size plus brokerages .And If it goes against my position, 400CE will reduce by loss.

Yes. Hedging will reduce your profit a bit but will protect you from undefined losses which you will incur from Shorting just 370 CE.

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