Regarding Stock Option Buying

[harsh_saharan11]

For example if I bought an option of a stock which went in the opposite direction of my view and out of the money it is almost 0.5 LTP premium but it is now illiquid at the OTM strike price and cannot be sold and might expire worthless but how can I square it off if I doesn’t want the risk that it turns ITM very near to the expiry or on the last day of expiry.Please help.

This is not a real trade but just asking it for risk analysis purpose

[ShubhS9]

@harsh_saharan11

For example if I bought an option of a stock which went in the opposite direction of my view and out of the money it is almost 0.5 LTP premium but it is now illiquid at the OTM strike price and cannot be sold and might expire worthless but how can I square it off if I doesn’t want the risk that it turns ITM very near to the expiry or on the last day of expiry.Please help.

To square-off your position, there should be buyers and sellers. If there are no buyers and sellers, then you won’t be able to square-off the position. Nothing much can be done in such a scenario.

[harsh_saharan11]

So we can only pray that the stock doesn’t move a lot on expiry and turn ITM?

Okay I guess brokerage firms will work on it then…cause there is a big risk if a stock moves a lot on expiry day and contract turns ITM