Suppose, I have bought BHEL Aug FUT (1 lot = 10500) at an average of 65 (Long position)
Expiry day BHEL price = 52 Rs
Suppose I want to take the physical settlement of BHEL and I do not close my BHEL long position, at what price will it be settled? 65 Rs (the price that I had bought) or the expiry day price i.e. 52 Rs?
Few more question
Are all FnO stocks applicable for physical settlement including BHEL?
Are there any charges/penalties for physical settlement?
Futures are marked to market, that means any profit or loss you make is settled daily and credit to / debited from your account. You can learn more about MTM here.
So the settlement price on the expiry date will be the buy/sell (average) price of the shares delivered to you, ie. Rs. 52 in your example.
Yes, physical settlement is applicable for all the stocks in F&O segment.
Brokerage charges are 0.25% of the physically settled value for giving/taking physical delivery of the shares.
STT is applicable at 0.1% of the contract value. You can check out more information here.
Thanks, so only I need to do for physical settlement for long position is to have that much available balance in my Zerodha account, corect?
Brokerage charges are 0.25% of the physically settled value Did not understand this. Can you please explain with the BHEL FUT example?
STT is applicable at 0.1% of the contract value Also please explain this with BHEL example
So the settlement price on the expiry date will be the buy/sell (average) price of the stocks, ie. Rs. 52 in your example. Are you sure it will be 52 and not 65? As per zerodha article, Settlement Price * Lot Size * Number of lots. Settlement Price = share price on the expiry day??
Right. To take physical delivery upon expiry of your Long Futures position, you’ll need to maintain funds equal to Settlement Price * Lot Size * Number of lots.
The settlement or the contract value will be Rs. 546,000 (Price 52 * Lot Size 10500 * Number of Lots 1).
So the brokerage at 0.25% and STT at 0.1% will be charged on this value.
The brokerage will be Rs. 1,365 and STT will be Rs. 546.
Right, the settlement price will be price on the expiry day.
As explained above, Futures are marked to market, any profit or loss you make is settled on the same day and credited to / debited from your account.
Up until the expiry day all the profit or loss you will be making would already be settled. So upon expiry the settlement price on the expiry date will be the buy/sell (average) price of the shares delivered to you.
You can check out this support article for detailed explanation.
What happens to Securities which are under Ban due to MWPL - since you cannot rollover. I got a notification for Cadila last week that since MWPL and Ban - it will be physically settled.
Does the securities come out of Ban on last trading day automatically due to expiry squareoffs and one can roll over to next month contract on last trading day
What margin is required to maintained in case the security is still in Ban period on last trading day - Zerodha says 40% - but if it will be settled physically - it would be 100% Right?
If one does not have DP with Zerodha, how does physical settlement happens ?
If any security is under ban period, you won’t be able to roll over your position as you cannot take fresh positions. You can however exit your position.
Yes, to take delivery of shares (Long Futures position), you should maintain sufficient funds, else your account will result in negative balance on which interest will be applicable at 0.05% per day.
and to give delivery of shares (Short Futures position), you need to have sufficient shares in your account, else it will result in short delivery. You can learn more about short delivery here.
else your account will result in negative balance on which interest will be applicable at 0.05% per day.
0,05% per day of the negative balance? e.g. the account balance is negative -100000 so it will be 100000 * 0.05% per day penalty correct?
What is meaning of nudge for security - Will be physically settled - even when it is out of Ban. Talking again about Cadila here.
How does bank work - if the security MWPL goes down intraday - is the system dynamic and allows new trades or happens at EOD for positions to move out of Ban
How does delivery happens - I do not hold DP Account with Zerodha - And i’m long Cadila. Per your system nudge, this contract will be physically settled. Question here is - Along with margin - do I also need to deliver the shares ?
You are required to bring in funds if your account results in a debit balance after physical delivery failing which the delivered shares will be liquidated to make good of the debit balance. You cn check out this support article, everything has been explained in detail.
@ShubhS9 Hey why is it showing sell and loss in my FnO P&L statement??? I never sold and wanted physical delivery. I had more than enough balance in my account. Can you please check and let me know how to fix it ASAP??