Can you exercise a call option below strike price?

Typically, put option investors only exercise their right to sell their shares at the exercise price if the price of the underlying is below the strike price. Likewise, call options are usually only exercised if the price of the underlying is trading above the strike price.

What happens if options expire ITM?

If an option expires out of the money, nothing happens. No shares are assigned and the entire position expires worthless and disappears from the trader’s account.

What happens if a call option goes to zero?

Minimum price of an offer for a call option or a put option is 5 paise. That means,if the lot size is 100,then the premium works out to 5 rupees. You will not get any option for zero price.

Do we need to square off options before expiry date?

If you decide to square off your position before the expiry of the contract, you will have to sell the same number of call options that you have purchased, of the same underlying stock and maturity date and strike price.

What happens when a call option expires above strike price?

In the case of call options, if the stock trades above the strike price the option is in the money. Exercising the call option will allow you to buy shares for less than the prevailing market price. However, if the stock trades below the strike price, the call option is out of the money.

What happens if option doesnt hit strike price?

If the price does not increase beyond the strike price, you the buyer will not exercise the option. You will suffer a loss equal to the premium of the call option.

What happens if you don’t close an option?

If you don’t sell your options before expiration, there will be an automatic exercise if the option is IN THE MONEY. If the option is OUT OF THE MONEY, the option will be worthless, so you wouldn’t exercise them in any event.

What is the square off timing for index options on expiry date?

As a practice on F&O expiry day, brokerages used to automatically square off traders’ position after 3:10 pm and before market close of 3:30 pm for trades placed using intraday products. This typically take away traders’ opportunity to earn better premium.