Thank you, Raja and AW10,
So, if I purchase 1lot unitech 30call @ 2Rs. on5th Feb. and on 10th Feb. Unitech rises to say 35. I will exercise my option and book the profit of 3Rs.(35-30-2). or I may sell my call in the market.
If I purchase 1 lot Nifty 2800call at 125 on 5th Feb. and on 10th Feb. Nifty rises to say 3000. here I cannot exercise my option as it is European style and I have to wait till settlement day or I may sell my call in the market.
That means, the price of the option is depended on, among other things, on the style of the option.
Am I correct?
please also clarify what is the difference between American and European options on settlement day? I am thinking that unexercised options will be squared of at average rate on the settlement day and profit, if any, will be credited to my account( option buyer) in both styles.
please clarify.