How to exit a option which has gone Deep ITM due to less liquidity.
Assume I have taken a spread strategy where I have bought CE having strike price 300 of Tata motors and sold CE having strike price 310 it’s an basket order where both were executed same time now it’s in deep ITM since expiry is near what are the ways to square it off without taking it close to expiry……what to do if the strikes remain illiquid
Keep checking ask - bid.
Sadly No other solution for illiquidity
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What abt in case of nifty and banknifty will the index options have liquidity in ITM side…. In case of stock options it will be very less
Liquidity is far better in Nifty and Bank Nifty options when compared to stock options. Although as the options gets more and more " In the Money", the spread kind of increases.
But, overall - Index options are cash settled and so in that sense they are completely different from stock options.
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For retailer trader like us, even ITM index options will have sufficient liquidity (unless its very very deep ITM)
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