Options Intraday Confusion

So far I am confused about one silly thing in option.

  1. According to varsity all options in India are European Option which can only be exercised on the day of expiry. Which means no intra or exercising option early.
  2. But in some chapters it says most traders just capture 1-2pts and get out. This means intra or exercised early.

My confusions:

  1. Which one is correct?
  2. Can options be traded on intra basis apart from the expiry day?
  3. If exercised before expiry, are there any penalties or something like that?

Hoping to get some answers.
Thank you.

What Does Exercise Mean ? To exercise means to put into effect the right specified in a contract .

In options trading, the option holder has the right, but not the obligation, to buy or sell the underlying instrument at a specified price on or before a specified date in the future.

So, if Justdial 600 CE is trading at 5 and the lot size is 1400. You can only exercise the claim of getting settlement on the day of expiry unless settled.

Buying or Selling the contract before that is about transferring the contract. It is not exercising the contract.

It can be traded any time when NFO is allowed to trade.

You can not exercise before the expiry. Period.

Ok so exercising and transferring are 2 different things in the background.

Exercising = Settlement of contract completely. Can be done only on expiry day
Transferring = Transferring contract to someone else. Can be done intra or anytime before expiry.

Correct?

Yes. These are just terms without much sense. Definitions.