There are 2 types of options in Indian stock markets.
The options that are in money are automatically exercised by the stock brokerage house. Out of money options expire on the expiry date.
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- European style (Index options)
- American style (Stock options)
European style options can be exercised only on the expiry date of the option. In India, expiry date is the last Thursday of the contract month.
American style options can be exercised any time on or before the expiry date.
SEBI allowed both types of options in India in 2010 but stock exchanges have been only trading in European type options till now.
The options that are in money are automatically exercised by the stock brokerage house. Out of money options expire on the expiry date.
What do you think on this topic? Please express your opinion or ask any question through comment below. You can write to me at reply2sagar@gmail.com
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