All Stock F&O contracts to be settled physically by Oct 2019 expiry


I personally believe SLB is not picking up in India because there are futures on stocks and people can short them, in countries like USA SLB is quite popular because this is the only way one can short stocks as stock futures concept is not there.


Means in Future NSE will discontinue stock FUT. :thinking:


I don’t think so at-least in near future.


Incld Myself and many others prefer Stock FUT over Stock in cash Mkt.
If SEBI moves to threw out retailers from F&O completely than CASH mkt is only Left.
As interest rate in INDIA is higher than USA.


Stock FUT how they can discontinue, they would have to close stock market then


SEBI’s step taken for Physical delivery in STOCK’s matching US option mkt EXIT from European.
and also to promote Securities Lending and Borrowing (SLB) programme.

we don’t know their further step. :thinking:


Don’t come to any conclusion, SEBI will not discontinue, I am just saying how it works in US.


@lotus, @siva, @MohammedFaisal, @rj07

This rule is here to stay, and it is for the larger good.

Simplest way to deal with it is to consider the previous Friday as the new (earlier) expiry date :slight_smile:

Happy Trading


Liquidity and interest is usually a chicken and egg situation. Institutions don’t participate because the open interest/activity isn’t big enough, but because they don’t come in, the liquidity isn’t there.

I don’t think this physical settlement on its own will take away liquidity. What we need is people to come and start hedging their portfolio using options - for example covered calls. The biggest challenge in India is that I don’t think most traders have the portfolio size large enough to justify them using options.


Futures are main source of brokerage ,how come discontinue lol


@salamiindia Bro, Retailer are also source of Brokerage but SEBI’s step to threw out RETAILER what did you say?
I know FUT will not discontinue in near future. :slight_smile:


Totally agree, that’s how I’ve been trading commodity contracts all these days. Move to the next month early.


You are right @nithin but major Individual Investor doesn’t know how to handle portfolio by OPTION, SEBI & NSE promoting Mutual Fund by slogan “SAHI HAI” means don’t take much headache just do SIP or AIP.

Simple words it means IF U R a INVESTOR JUST DO MUTUAL FUND.
Many people who come directly to cash mkt don’t know or aware the concept of hedging and by bearing huge loss simply EXIT from EQUITY CASH.
AND last jump on trading.



This is because of lot sizes, thanks to SEBI , and SEBI don’t want to reduce the lot sizes ,


Physical settled unless one squares the options that is, so no impact for cash settling options prior to expiry.



Now that every stock is going to go through physical settlement, will Zerodha still continue applying 0.5% brokerage on such trades?

It is very prohibitive.

Especially, in the case where one has the stock in zerodha’s demat account and has an equivalent short position in fut or opt. This case is pretty straightforward and carries no risk for the broker.


Operationally it is extremely painful to support these trades unlike those executed on the exchange. Yeah, we plan to keep this for a while. We will take a call on this in a few months post all stocks going into physical delivery.


What is this 0.5% brokerage? This is first I am hearing this


If your position ends up with a physical delivery obligation on expiry (either you deliver the shares or receive them), there is a brokerage of 0.5% charged on the physically settled value.


Interesting article have a look.