its been a year since i started trading.
what i understand till now that index options are cash settled and if i take delivery no more STT only intrinsic value price settlement and stock options are delivered if we hold it until expiry.
can anyone send a link where in i can see how the delivery of contracts happen either it is index(say nifty or bank nifty) or stock options.
can anyone share me a sample copy of settlement.
if its stock option if i dont get any buyers/sellers does that mean i have to produce say (lot size share in my holdings?)
Index F&O are cash settled, any profit or loss arising will be credited to / debited from your account.
If your Option expires ITM, it’ll be settled at Intrinsic Value, but if you’re a option buyer and your position expires ITM, on that STT will be applicable at 0.125% on the Intrinsic Value.
If you’re holding a stock option and it expires ITM, you’ll be obliged to take delivery of underlying shares or give delivery of underlying shares, depending on your position.
In both cases, you’re required to have sufficient funds to take delivery and if your obligation is to deliver shares, you should have sufficient quantity of underlying shares to deliver, not having underlying shares will result in short delivery, more on this here.
Also, for more information on physical settlement, you can refer to this post.