The derivative market has Futures and Option contracts. This could be a commodity, stock, currency, etc. The Indian stock market, the last Thursday of the month is the expiry day for monthly futures and options. Traders must settle their positions on or before the expiry day. In F&O markets, investors participate in speculating and diversifying their portfolios. The expiry date refers to the settlement of F&O contracts. There might be high risk and much volatility on expiry day. The stock market can turn bearish or bullish depending on the nature of the derivatives contract settled on the expiry date.
The profit or loss of an F&O contract at expiration depends on the premium paid and the difference between the futures contract price and the option's strike price. For instance, selling a call option with a premium of RS. 200 can result in various outcomes depending on the futures price at expiration.
Expiry day has many effects for market shares, volatility, and strategies. The future has the same rules for sellers and buyers, but there are two types of options. These types include put and call options. Mainly, put refers bearish and call refers bullish trend of securities.
So, guys play safely with proper strategy on the day of expiry.
0 Comments