Query Regarding Nifty Option Expiry - Urgent

F&O
1

I have a query regarding Nifty PE and CE expiry.

Suppose I bought Nifty May 24500 CE @Rs 100 and Nifty May 22500 PE@ 110.

I do not exit the trade before the expiry date in both cases.

On 29th May, the option expires and if Nifty is below 24500, then my CE premium is lost. If Nifty is above 22500 points, my PE premium is also lost.

However, what happens if

  1. Nifty crosses 24500 points on the date of expiry of Call option. What is the rule for me? In case of stocks, I must buy the stock at the strike price. But what do I need to do for Nifty indices?

  2. Nifty closes below 22500 on the date of expiry of the Put option. Again, what is the rule for me then?

Please help.

2

In both the scenarios, In the Money (ITM) index options contracts are settled in cash…

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3

You don’t need to worry for index positions if you are unable to exit it. It will be cash settled. You need to worry only for stocks ITM positions where you will have to either give the delivery or take the delivery

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4

a. In case of stocks for ITM options, why we have to give or take delivery. as per definition. Option buyer has “option” to buy (take delivery) or sell (give delivery). It is not mandatory as per definitely. then why it is mandatory here.

b. what if dont take delivery or have stocks for delivery. Will there be penalty?

1 Like
5

Read it, you will understand. Don’t go by the “definition”