Call selling against future buy

Zerodha
1

Lets say I sold 650 CE Tata consumer thinking it will not go above 650 but somehow it goes up and up and close to expiry …I am convinced it will settle above 650 on expiry date so…I am suppose to give delivery of the whole lot but I don’t have stock in demat …so can I buy future a week before expiry ?
Since future is now physically settled as options …will it suffice my requirement to give delivery ?

I believe future will be delivered on same day that I am suppose to give delivery ? (T+2) …correct me if am wrong? @ShubhS9

2

If you are holding a Long Futures position and Short Call Option, if this expires ITM, your obligation will be netted-off against eachother.

Check out this table, which explains net-off scenarios:

TH4JQCYS_Screenshot_208

You can learn more about physical settlement here.

1 Like
3

lets say I sold call option 2 weeks before expiry …can I buy future on expiry day or a day before expiry and I will still be safe …i.e. net off ? What I am missing here?

4

You can take counter position as described in the above table anytime to net-off your obligation.