Holding stock options
Hello sir,Can you tell me how to hold stock options for at least 2 weeks after it's expiry date?
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Category: Future and Option
Can you tell me how to hold stock options for at least 2 weeks after it's expiry date?
#1700
Dear Anjali, First understand what is stock option?
I am giving an Example.
Suppose Reliance Industries is trading near 810 and you are expecting a uptrend in coming week, so you will go for buying call option of Reliance Industries.
the strike price may be as per your premium paying capacity but always try to buy in money option .
So you have to buy 800 strike price or 820 strike price call option.
Suppose Reliance Industry goes up from current market price that is above 810 you start making money as the premium will increase day by day by traders.
But as Option premium is totally depend upon the time value it is not wise to hold it for a longer duration as on the day of Expiry your premium will become zero ( if the strike price goes out money or at money)
when ever you buy a stock option just decide your profit and loss ratio and then exit as per your comfort zone.
I am giving an Example.
Suppose Reliance Industries is trading near 810 and you are expecting a uptrend in coming week, so you will go for buying call option of Reliance Industries.
the strike price may be as per your premium paying capacity but always try to buy in money option .
So you have to buy 800 strike price or 820 strike price call option.
Suppose Reliance Industry goes up from current market price that is above 810 you start making money as the premium will increase day by day by traders.
But as Option premium is totally depend upon the time value it is not wise to hold it for a longer duration as on the day of Expiry your premium will become zero ( if the strike price goes out money or at money)
when ever you buy a stock option just decide your profit and loss ratio and then exit as per your comfort zone.
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