Can you believe that a Nifty Call/Put option pricing at Re.2/- can fetch upto Rs.20 or even more on an expiry day (last-15-minutes) Trade? But it's regarded as a high risk type of trade. Now let me explain the real risk involved in this trade. Let's say you purchase a Nifty Call (current month)that cost Rs.2/- at around 3.15 P.M on an expiry day. The maximum risk you are having is Rs.2/- + brokerage & transaction charges or say Rs.3/- in total. While this Call has a profit potential of Rs.17 or even more if Nifty goes up around 30 points from the buy level before 3:30 P.M. There are some conditions to fulfill to enter this kind of last-minute trade on an expiry day such as the suggested Figure example given below :-
Let's say Nifty Spot is trading at 4290 (+20 from previous close of 4270) at around 3:15 P.M on a confirmed uptrend. We buy this near ATM Nifty Call of strike price 4300 (underlying Spot Nifty at 4290) at Rs.2 or Rs.3 at around 3:15 P.M. And after 12 minutes at 3:27 P.M, Nifty goes up another 30 points from that level of 4290 thereby reaching 4320 level. That 4300 Strike price Call will have a exercise value of Rs.20/-. So, we will be able to sell it at around Rs.20 at 3:28 P.M giving us a reward of Rs.17/- with a risk of Rs.3/- within a timeframe of 15 minutes or less.
However, this is a highly time-sensitive trading and can be done by those traders who uses direct trading terminal on their PCs or has somebody at the terminal who trades on his behalf.
