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…

[pankushri]

Before posting this i have read

What is Zerodha's policy on the physical settlement of equity derivatives on...

@ShubhS9 @siva please explain the below line shared by support executive .

"If you haven’t squared off ITM options on the expiry day, as per the physical delivery policy, Call/Put options – ITM options get exercised but expire at 0 value "

My trade was HeroMoto 2750 CE buy

HeroMoto 2800 CE Sell. Closing price of Heromoto was 2830

I should be in profit.

[ShubhS9]

Can you message your ticket number? Will have this checked and clarified for you.

[Avinash_Nagre]

I have question about the same. For e.g I have bought CE of TCS of strike 3000 and on expiry the stock closes @ 3200. If i am unable to sell it due to liquidity. If I sell future @ 3200, I assume that I dont have to take delivery of stock. But, how the CE and future contract will be settled?