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