Comment on STT Trap - Options Expiry - NSE BSE MCX-SX

Akand commented on 05 Nov 2017, 03:32 PM

Is it possible to use a Short Put strategy to buy stock in India? I ask this question because I hear that all settlement on expiry is cash based, not based on taking/giving delivery of shares.

For eg: I would like to buy 1200 (1 futures lot) shares of UPL which is now trading at 775. Can I sell the near 760 PE for Rs15 and expect to take delivery of the shares upon expiry? I have the required funds to pay for this. I understand if the shares closes on expiry OTM, I wont have to buy anything, but if it is ITM, then can I take delivery of the shares?

Similarly, I have 7000 shares of Idea. I want to Short the near 125CE for Rs 2. If the prices crosses Rs 125 on Nov 30 (expiry day), can I square it by forking over the 7000 shares that I now have? If not, how will settlement be done?

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