As the physical delivery of underlying asset is compulsory in F&O. i need to know whether if options can be exercised without the need of physical delivery in netoff positions for example:-
Spot price at time of entering position: 5700
Buy Maruti Fut
Buy ATM Put option
Spot @ expiry: 5600
Here is the list of scenarios in which positions are netted off against each other
You can read more here.
@siva What about margin requirements, i guess margin requirements will increase(10, 25, 45, 70%) for uncovered positions as expiry date approaches and not for net off positions.
For index there won’t be any increase but for stocks margins will be double of actual on last wednesday and thursday of expiry week.