What happens to a long call option position upon devolvement? Option: Converts to a short futures position, Converts to a long futures position, Remains unchanged, Becomes worthless

<< Back

Hi

Show Ans

i

What happens to a long call option position upon devolvement?

Converts to a short futures position

Converts to a long futures position

Remains unchanged

Becomes worthless

<< Back

Hi

Show Ans

i

When will the 'Devolvement Margin' be assigned by exchanges?

On the day of option expiry

Few days before the option expiry based on a 'What if scenario'

At the time of option purchase

A day before the option expiry

<< Back

Hi

Show Ans

i

In the context of physical settlement, what is the obligation of a trader holding a long futures contract at expiry if they choose not to close or roll over their position?

To sell an equivalent number of shares in the open market

To forfeit the initial margin deposited for the contract

To extend the contract expiry date with additional margin

To pay the full contract value and receive delivery of shares

<< Back

Hi

Show Ans

i

Which of the following F&O positions would result in a 'Take Delivery' obligation?

"Short ITM Call"

"Long ITM Put"

"Long Futures"

"Short Futures"

<< Back

Hi

Show Ans

i

What happens to a futures contract upon reaching its 'expiry date'?

It ceases to exist, and a new contract with a different expiry date is introduced

It converts into a forwards contract with similar terms

It becomes eligible for physical settlement of the underlying asset

It automatically renews for an extended period

<< Back

Hi

Show Ans

i

What action is required for 'Close to Money' (CTM) option holders upon expiry?

No action required

Contrary instruction to prevent exercise

Explicit instruction for devolvement

Automatic exercise