How does the new physical settlement of stock derivatives work?

[Prayag]

Yes, the increased margin requirement for physical settlement is now applicable only on the expiry day and it is “Higher of (a) 40% of the contract value or (b) SPAN + Exposure margin prescribed by the exchange”. Refer to this thread -

Relaxation in Physical Delivery Policy - Margins collected

Due to physical delivery of stocks for stock F&O contracts, the margin required to trade these contracts increases substantially before the contract expiry. The policy on physical delivery margins has been tweaked in the following manner : Futures and options short Policy Margin increase day Margin amount New Policy Expiry day (i.e. last Thursday of the month) Higher of (a) 40% of the contract value or (b) SPAN + Exposure margin prescribed by the exchange Old Policy Last two days o…