Comment on STT Trap - Options Expiry - NSE BSE MCX-SX
commented on
12 Nov 2015, 06:58 PM
When premium moves up, as an option writer u r losing money. Automatically the margin required to hold this short option goes up. All options in INdia are european, so the buyer can’t exercise the right until the expiry. The buyer can just go out and square off his position by selling on the market.
Premium is directly proportional to how the spot will move, so technically not possible that premium will move up but spot never goes below strike. Suggest you to go through the options module on varsity http://zerodha.com/varsity/