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

yash commented on 13 Jun 2014, 01:27 AM

Hi Nithin…the Q&A is Amazing…
Please address my doubt…

Market Today ended at Nifty – 7650
If i buy a Deep ITM (and Long Expiry) Call / Put option.
For eg.Today i buy – Nifty Call Option (Aug 2014 Contract) of Strike 7300 for Rs. 520/-…

Case 1 – If Nifty on Option Expiry (28th Aug 2014) touches 8000
then in this case my already Deep ITM Call option gets deeper…so will there be an increased risk of illiquidity…so i wont be able to sell in the market, BUT can i wait for the day end, so that the option is excercised and i get intrinsic value??

Also, please explain the process of Excercising the option on expiry….is the pay out calculated based on intrinsic value?
or there is some other calculation methodology??

View the full comment thread »