Auto square off 3-4Day prior expiry

Hi,
I want to know is this Auto-Square off 3-4 day prior expiry is lifelong or there is a possibility that it will stop sometime in foreseeable future???

I am guessing you are talking about this.

I am guessing after a couple of expiry there will be more clarity. The best case scenario I think will be where futures and short option positions will be allowed till end of expiry, but if you want to hold buy option position you would definitely be required to bring in full money/stock based on if you have bought calls or puts.

Thanks a lot for info…
But even in buy case why to bring in full money as we need to pay only if at expiry day before 3.29pm 1)we are unable to close position and
2) even if we fail/Default there is a penalty provisions…
3) there is a privision w.r.t holder to decide wheather to exercise or not then why to do all these stuff i really dnt understand…
.
Instead of getting beneficial to retail trader (Dreaming to be HNI aftr its hard work) it seems going against.
.
And yes what SEBI wants is to bring indian markets in line with global practices then
I have some Question who will ans this

  1. in india after GIFT city getting developed mkts got divided i) in gift city there is cash settlement make physical there as well ii) STT and many other taxes are exempt there do the same here as well…
    Why same matket is divided in this manner
    Is yhis a global practice that one type of participant will get this kinda contract and other(BIG PLAYERS) will get diff kinda contracts…???
1 Like

And haan yes…
We do hv formula as well to escape delivery or payment… Even after keeping position open after expiry analyze Annx2 exel wala wid FAQ jo nse ne circular me daalaa tha…
Then why to stop small traders like us…???

If a contract is in the money, then it is compulsory exercise, there is no option. The option exists only with close to money contracts. But it isn’t possible till the last minute on expiry day to figure what will become close to money.

The risk here is, a person with Rs 5000 of premium can end up having to give or take delivery of Rs 5lks. If the Rs 5000 is all that the client who has taken the open option position has, imagine the risk that will suddenly come on the brokers head.

Read the NSE circular first then reply whoever you are…
Sorry to say You dnt seem to hv any knowldge on sub

:slight_smile: Guess you didn’t read my answer

Close to money or CTM contracts (what you are referring to) are the only ones which will have an option. Deep in the money options will have compulsory delivery. Check the link below to see which strikes are considered CTM

I wonder Why people ask such questions , if they already know the answer?

See the main/Original Q… Den see the reply and then comment my dear friend…
M litl nerous wid the future regarding how settlement gonna done… As my trading systems r purely based on that

Now I understand Why you just want to hear what you want to hear and not the reality of things around you.

Like being in a La La Land. Good Luck

M not against any changes/Amnendments in system…
I just dnt understsnd why it is not going to be implimented ad per rules…

  1. no rule says brokers can square off 3/4 days prior
  2. if i default (Be it payment/delivery) for that ther is a margin collected (both MTM and settlent)so broker dnt hv to worry how i will escape penalty
  3. contract is open still not allowing to trade is nt a right think in pure equity(Cash ) mkt brokers gives 5-6 time leverage and t+90 days to settle in some case but in F&o we use it to hedge but not allowing to do same , we need to do in nxt month contract which result in high cost of hedging without any reason
    .4) check out whatd happening in GIFT city(Gujrat ) same mkt , these changes should inpliment there as well, then i wont Ask a Single Q