For you to be profitable, HH should close above 3510 by expiry. You will lose all the premium amount if HH closes at or below 3500.
There are 2 things
- You square off before 3:30 pm on expiry day
- You dont square off and let the option get settled by the exchange for you.
In first case, you should look at the premium value, If premium value is higher than your buy premium (more than 10 rupees), then you can square off and take the profit (the difference between the square off premium value and your buy premium). If the premium is down is down, then you will incur loss in this method.
In second case, you should look at the closing price of HH, not the premium value. You will get the money from exhchange the difference between closing price and your strike price, example if HH closes at 3513, then you get from exchange 3513-3500=13 rupees to your account. (You are in 3 rupees profit overall)
If HH closes at 3504, then you get from exchange 3504-3500=4 rupees, so in net you are 6 rupees loss.
In first case STT value is very less, in second case exchange charges you around 0.125% of tournover value as STT, so you will lose a bigger amount in second case. So you should check which one is beneficial and act accordingly.
kartik, if HH closes at 3510 and if still the premium down then what will happen and another question is if i bought 8000 call 100 shares trading at 300 rs premium and nifty trading at 8300 and on expiry nifty comes down to 8100 and 300 rs premium falls to 100 rs , will my loss be 20000 rs?
On Expiry of HH closes @ 3510, the price of the 3500 call option will be Rs.10, hence you will neither make money or lose money on this contract (of course you still have to pay transaction and brokerage charges). And for the 2nd question, yes you will lose 20K.