Trading and Settlement:

Final settlement of option contracts is on the last Thursday of each month and all open positions on the settlement date will be closed out by the Exchange at the settlement price(spot value of the asset on the settlement date) if the contracts are in the money. Option contracts out of the money or at the money will be allowed to expire because they are worthless from the point of view of option buyers.

Besides, final settlement of the contracts by the Exchanges concerned, buying or selling positions of option holders and writers could be traded on a daily basis and positions could be closed out at any time by entering into an opposite transaction. For example, a buying position in a type of contract could be closed out by effecting a sell and vice versa and profit can be booked without waiting for the final settlement day. Thus, options are giving profitable trading opportunities to the participants on a daily basis.