Commodity long position square off

General
1

In kite app option view I see that it is mentioned till 7pm ist can square off the position after which broker will square off.

  1. This means traders will not be able to square off the position manually after 7Pm? Is this for all ITM - OTM

  2. Till commodity markets closes, from 7pm to 11.30pm if I close the position, will not be able to square off / close the position manually or will not settle? Any Xtra charges

  3. IF I don’t hold the min margin in my account to convert position into futures then the option will be squared off rather than conversion into futures settlement

  4. Whatever profit I have made the diff will be paid as cash settlement - is fut price 165000 - GOLDM CE 160000, means actual profit which I receive will be less if I don’t square off in time

  5. I don’t have min futu margin but I tell my broker to DNE on a Condition that - if I don’t close I can make an right to broker to close options b4 market closes & option expires without gng forward in conversion into FUT Contract but after 7pm. How this works?

  6. If I’m unable to close position b4 7pm due to less liquidity or illiquidity then what happens?

I have read this devolvement & have these Qs as I hold Jan expiry ITM

Screenshot_20260128-225209
Screenshot_20260128-2252091080×2400 195 KB

2

@Adarsh_Patil

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3

Not exactly. You can manually square off your position at any time before the market closes (usually 11:30 PM or 11:55 PM). However, we will initiate an auto-square off starting at 7:00 PM to prevent the position from devolving into a Futures contract.

If your position was not auto-squared off post 7:00 PM (because you maintained the required margins), you generally retain full control to manually close the position until market close. If you are unable to close the position by market close (for any reason) and the option is “In The Money” (ITM), it will devolve into a Futures contract.

Yes, that is the primary goal. If you do not hold the required margin to support a Futures position, we will attempt to square off your options position before the market closes.

Correct, and the next day future buy average will be 165000

If you do not have funds, we will prioritise squaring off the position ourselves. We will only submit a DNE instruction to the exchange if the position remains open at market close and falls within the eligible “CTM” (Close To Money) strikes defined by the exchange.

The option will expire and devolve into a Futures position.

explore this link :grinning:

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