Comment on Basics on Options Shorting/Writing

Yogesh commented on 28 Jan 2016, 12:33 PM

Hi,
I would like to know if I write nifty call option 8000 (currently nifty is at 7400). Its premium is say 10 rs.
after 10 days, nifty is at 7600 but the premium of nifty 8000CE is 6 rs. If I square it off, then will I earn rs.10-rs.6 = rs.4 profit per option. The expiry is 8 days away from the date of squaring off. So Instead of waiting for expiry, i square it off before expiry. Kindly guide me if I am correct. If I am wrong, please let me know how.

Thanks,
Yogesh

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