I am beginner in options I have one lot of tata steel aug 114 CE. Of I do not square off will it simply expire or will it automatically buy tata steel @114–CMP 106.55 and I have not exit position mistekekanly will I bear penalty or maintain a balance @ShubhS9 please help me in it and please LET ME KNOW my contract is ATM OR OTM

No, the option will expire worthless if Tatasteel closes below 114 today. In which case, you will not be delivered the shares.

If, the stock moves above 114 today, then yes, the option will be exercised and you’ll have to take delivery.

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Ltp 0.05

Options is something i ll never understand.
And I see people with big fat losses. Pretty normal in options it seems.

Will my contract end automatically or I sell it

If you don’t sell your contract it will get settled by clearing house. There is no need for you to sell at your end for ITM, OTM scenarios that may play out. But in ITM scenario if you don’t want physical delivery of stock you need to sell it before market close.

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It will end at 3:30 regardless of what you do.

If the stock closes below 114, then your option expires worthless and nothing happens.

If the stock closes above 114, then your option will be exercised and you will be delivered 4250 shares at 114 each. If you don’t have enough margin, then this can lead to a debit balance and penalties.

If you want to be safe, then sell it but most likely the option should expire worthless.

Hey @sanket_pawar, currently your position is OTM. Today is an expiry day, if Tata Steel closes below 114, this option will expire worthless and there will be no physical settlement.

If Tata Steel closes above 114, it will be ITM and physically settled. You can learn more about the physical settlement here.

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