Comment on STT Trap - Options Expiry - NSE BSE MCX-SX
commented on
28 Mar 2017, 01:08 PM
Thanks for the response. Just to ensure that I have understood it correctly…
It means that in the money option that gets exercised automatically based on underlying stock price close (and not the Closing price of the option – which weighted average of last 30 minutes of trade). Is this correct?
In the above example:
1. Short SBIN 260 CE at 15
2. Closing price of underlying on expiry – 270.45
3. Closing price of SBIN 260 CE on expiry (weighted average of last 30 minutes of trade) = 10.3
The profit (not considering brokerage or any other charges) would be 10.45 (270.45-260) and not 10.3 (which is Closing price of the option).
Is this correct?