Someone pls explain exercising option

[ksksat]

Guys i am very confused about why we need to square off a call option before expiry.

I know the STT implications.

My question is in a deep ITM scenario where my profit zone is high even after STT.

In such case if exercising option will earn more profit than square off right?

Also when should one exercise his option?

[Sensibull]

@ksksat

Guys i am very confused about why we need to square off a call option before expiry.

I know the STT implications.

My question is in a deep ITM scenario where my profit zone is high even after STT.

In such case if exercising option will earn more profit than square off right?

Also when should one exercise his option?

Hey @ksksat

We made this video to answer your question. The answer is -
Always square off is the option is liquid.
If not, see the price. If towards the expiry, your Option Price > Intrinsic Value minus STT, then square off

Please watch this video to understand this completely

- YouTube