Expiry delivery obligation

Dear Team,

Pls clarify my questions:

1st Question:
If have NOV expiry ITM short call and long FUT left without exiting it today. I guess this is not a problem and I will get the difference intrinsic value as my profit. Is my understanding correct ?

2nd Qeustion:
I have PVR DEC expiry long FUT & PVR NOV expiry 1300 CE shorted at 40 premium. But today on expiry day, i left my short call without exiting. PVR closed today at 1311.85 and now this short call of 1300 strike price is CTM and so will it lead to short delivery ? What is the minimum fund for which it becomes short delivery ? As I have good cash in my account. Should i withdraw to avoid short delivery in situation ?

As you are holding Long Futures position and a Short ITM Option, your physical settlement obligation will be neted-off. Your Futures position will be settled at the closing price of underlying, and for the Short ITM position, you will get to keep the premium received when you took the position.

For CTM Short positions, the exchange does random assignment. If assigned you are required to have underlying shares in your account to deliver, not having underlying shares to deliver will result in Short Delivery. Appropriate auction penalties from the Exchange shall be charged on your account for such short deliveries. Read more on the consequences of short delivery here..

Short Delivery happens when you don’t have shares to deliver, to deliver these shares to the buyer exchange will hold an Auction, you should have funds in your account to cover the penalties which will be charged by the exchange.

Can i buy shares tomorrow to avoid short delivery ?

To avoid Short Delivery you should have shares in your Demat account on expiry day. If you buy tomorrow this will be credited to your Demat in T+2 days ie. on Wednesday (Monday is holiday) while the shares from physical settlement have to be delivered on Tuesday.

Thank you !

When and How do I know the assignment of exchanges for my CTM short positions to know whether it goes to delivery obligation or not ?

You will get to know once you receive the Contract Note or ledger entries are posted.

Thank you so much.

1 Like

so you are saying if i hold a future contract with long with short itm call option will not obligated to physical delivery , it will settled in cash right?

Right, your obligation is netted-off against eachother, so for you it is settling in cash only. Below are the scenarios in which net-off happens:


You can learn more here.

second leg bit confusing , second let short itm call, long itm put means short itm call or long itm put

then what about the credit and debit spread options strategies ?


Both positions have to expire ITM to net-off your obligation, if one expires ITM and other expires OTM then you will have to fulfill the physical settlement obligation.


Hi, if you don’t mind can you update if the position is assigned for delivery and the process.