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

Nithin Kamath commented on 29 May 2014, 04:04 PM

Such issues do happen with stock options, so basically all such ITM options are cash settled after expiry. what this means is that

Since you shorted 570 puts and market closed at 536.1, a premium of 500 x 33.9 (570-536.1) will be debited from your account today and given to the buyer of that option. When you had shorted you would have received an x amount of premium, the difference between that and 23.9 will be your loss on this trade.

It will be covered at exactly 33.9 if closing price of BPCL was 536.1.


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