Comment on Basics on Options Shorting/Writing

Nithin Kamath commented on 14 May 2014, 05:17 PM

Yes, on expiry if reliance closes at 1050, you will have to give back Rs 15000, but note that when you have shorted there would be a certain premium credited to you. So assume you shorted when the calls were at Rs 30, and since it closed at 60, your net loss would be only 30 * 250 = 7500.

There in nothing called buyer wants stock settlement, when you short options the risk is unlimited, so for example if Reliance goes to Rs 2000, you will end up losing 1010 * 250.

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