What happens to put options if a company delists, do I profit or lose?
This is a hypothetical scenario. If a company is about to be delisted, SEBI removes it from the F&O list much earlier. Just for academic interest, you haven’t mentioned whether you are long or short. When a company gets delisted, its share value becomes zero at expiry. If you are long, you lose. If you are short, you gain.
Adding to this- If the company delists and the stock price crashes, you make money on your put.
If it delists at a high buyout price, your put is worthless.
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Hello,
As I’ve mentioned I have put options of stocks I invest in. I was thinking I’d pay close attention to volumes and liquidity and exit my positions before the contract becomes illiquid 
A contract becoming illiquid and a stock getting delisted are two very different situations. If a contract turns illiquid and you cannot exit your position, you will end up with a delivery obligation.
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When a company announces its delisting, exchanges will compulsorily close all open positions in that stock on the specified ex-date. This creates a physical delivery obligation for any contract that is in-the-money (ITM) on ex-date.
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I couldn’t find answers on Google or YouTube so I’m instead asking industry professionals as you could lose all your money even after hedging and it maybe a once in a blue moon event for top 10 nifty 50 companies to fail because margins are collected everyday right so that there’s no default from either of the parties then why should I still lose all my money?
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So what happens if I exit before the expiry? As you only have to take delivery for stocks on expiry right? So can I exit 3-4 days before ex-date?
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Delisting of a stock is indeed a rare event, especially for large Nifty 50 companies, since they already meet strict exchange criteria to be in the F&O segment. Exchanges also collect margins daily, so the risk of default is extremely low.
If a company decides to voluntarily delist, there will always be prior announcements and a process laid out by the exchanges. If you’re holding any open F&O positions, you’ll have time till the ex-date to exit.
• If you exit your position before expiry, there is no delivery obligation.
• Delivery obligation arises only if you still hold open stock option/futures contracts on expiry day.
• Even in case of delisting, if you end up with delivery, you can tender your shares in the delisting offer at the discovered price and sell them back to the promoters.
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