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BUY BANK NIFTY 39000 PUT @ 246
It means what it says:
It's a BUY order for a PUT
The underlying is the BANK NIFTY
The strike price is 39,000
The cost is 246
This entire statement is what a buy order would look like.
If you don't know what these terms mean then you should read about what options are.
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If Nora sells a call, she closes her position but the person who bought the call now has an option on your shares. Until that person exercises the call you still own the shares. If the stock price is above the strike price you should expect that the option will be exercised by someone. When it is exercised you will be forced to sell the shares and will ...
4
Stocks whose options are illiquid can be problematic for getting fills at the midpoint or better. This also holds true for any series that is illiquid (deep ITM or far OTM options as well as newly added expiration weeks/months).
There's no way around this because the willingness to split the B/A is a function of liquidity. If it's not there, it's not going ...
2
Premiums are always received upfront, plus a day or two for settlement. Premiums are not received when an option position is closed or expires.
It's not taxable at that time, however. The premium received (or paid for a long option) is accounted for when the position is closed (e.g. when a short option is bought back) or when the option expires. The premium ...
2
Unless illiquid, prior to expiration an option contract will be bought and sold many times over. So while your short call contract is open, your counterparty will always be changing and your initial link to "Nora" will cease to exist.
The only possibilities that match your proposed scenario would be if:
"Nora" was your counterparty in ...
1
A derivative derives its value from another financial asset. But a company's stock derives its value, at least in part, from the real assets of the company (tangible and intangible), whose value is somewhat subjective and is not separately discovered in real time by markets. Thus, within the financial space, a stock is a "primitive" asset not ...
1
AFAIC, one should sell short puts when one is willing to acquire the stock at the strike price less the premium received. Otherwise, you might be asking for trouble.
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