Option Expiry and Settlement
Every option contract has a fixed expiry date, after which it becomes invalid. In India, for example, index options like NIFTY and BANKNIFTY expire weekly or monthly, while stock options usually have monthly expiries.
There are two types of settlements:
Cash Settlement: The difference between the strike and market price is credited or debited in cash (used in index options).
Physical Settlement: The actual delivery of stocks occurs (used in stock options in India).
Understanding expiry cycles is crucial, as price movements near expiry can become highly volatile due to time decay and traders closing positions.
Every option contract has a fixed expiry date, after which it becomes invalid. In India, for example, index options like NIFTY and BANKNIFTY expire weekly or monthly, while stock options usually have monthly expiries.
There are two types of settlements:
Cash Settlement: The difference between the strike and market price is credited or debited in cash (used in index options).
Physical Settlement: The actual delivery of stocks occurs (used in stock options in India).
Understanding expiry cycles is crucial, as price movements near expiry can become highly volatile due to time decay and traders closing positions.
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Hello Everyone! 👋
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
Publicaciones relacionadas
Exención de responsabilidad
La información y las publicaciones que ofrecemos, no implican ni constituyen un asesoramiento financiero, ni de inversión, trading o cualquier otro tipo de consejo o recomendación emitida o respaldada por TradingView. Puede obtener información adicional en las Condiciones de uso.