InvestorQ : How is trading in options in India different?
Suhani Mirza made post

How is trading in options in India different?

Answer
user profile image
Anu Biswas answered.
2 years ago


In India all options and futures are necessarily cash settled. That means; there is nothing like delivery against futures and options. All profits and losses will be adjusted in cash and either credited or debited to their trading accounts. Any losses will be debited to your trading account and any profits will be credited to your trading account. You can square off your options position at any point of time and book your profits or losses on the position. It is as simple as that. Unlike in other countries, options trading has fixed expiries with a near month contract, a mid month contract and a far month contract. All options contracts will expiry on the last Thursday of the month and they will be settled in cash only. When you trade options you actually trade in the right to buy or sell an asset. Option premium is the price of that right and not the price of the asset.