Are Nifty futures also auto-settled on expiry like options, if we do nothing? Or do we need to take action and square it off ourself?
Upon expiry Futures too are settled by the exchange if you do not square-off your position.
If we want to hold till expiry, Which is better and practiced by seasoned traders?
To square off ourself (say at 3:29pm on expiry day) or to let the exchange settle it. (asking for futures and options both)
Further, In option chain, i have noticed open interest bars for all strike price falls below the axis in sensibull. Does it occur when the contracts are squared by people themself or by exchanges?
As Index F&O are cash settled, you can do either, there is not much difference between you squaring-off your position or letting it expire.
Though, if you are buyer of the Option and your Option position expires is ITM, exchange charges additional STT of 0.125% on Intrinsic Value of the Option.
This can be traders squaring-off their positions. Exchange will settle contracts only after market closes on expiry day.
Also if you are an option seller… And at the time of expiry if your opinion is ITM then it is better to square off your position by buying back the contracts at the current market price before the market close… Or else you have to deliver or receive the shares of the underlying…