USDINR option exercising

#1

If I purchased USDINR today at 69.48 considering it’s a good support to buy and simultaneously buy an ITM 69.75 PE 7th jun expiry , does it make sense to exercise the PE tomorrow after market close?

Let’s assume it’s just 1lot of future and PE , SO total cost would be 2000 fut margin + 4225 premium paid + brokerages and taxes

If I exercise tomorrow , considering USDINR ends ITM , what will the actual final PNL. Look like considering I don’t own any USDINR physically to begin with…

It’s all cash settled and I’m fairly new , so before doing the actual exercise I want to understand

Thanks

#2

Anyone experienced enough to advise?

#3

All currency trades are cash settled, so there is no concept of exercised. On the expiry day all in the money options get exercised automatically.

Suggest you to go through the futures and options module here

#4

I know it’s cash settled and what I’m asking is , what will the exact PNL look like ? It’s it possible to know if we don’t know what rate the PE is at just at the time of expiry?

Or should I just see if I’m in overall profit if any , and manually square off before market close ?

Does doing the above also make any sense ? with exercising , STT would kill any profits I guess

#5

No STT for currencies, go through the above link if you want to learn more on options.