Comment on Basics on Options Shorting/Writing

Nithin Kamath commented on 01 Jun 2015, 06:41 PM

Karthic, in India all options are cash settled. There is no actual delivery of the underlying that happens. Suggest you to look at the options module here:
A stock is at Rs 100, you short 105 calls at say Rs 2. On the expiry day the stock is trading at say 104. You get to keep the entire Rs 2 that you had received by writing the option. If stock on expiry day is at 107, you have to give back Rs 2. Do read up the module.

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