Physical settlement of f&o position

F&O
1

Dear @nithin ,
If there is one long and one short in f&o of same underlying of a stock, which became netted off as regards to physical delivery. But what if one leg is CTM and other party of that leg do not exercise the options ?

2

Hey @nsingh,

For the short option leg of the contract, if its marked as CTM do not exercise by the buyer on the other side, you will get to pocket the instrinsic value that remains but you will end up having to take/give delivery for the other leg that that the position was netting off.

You only get to know if the contract was marked as do not exercise after the expiry day as the exchange randomly assigns CTM do not exercise positions to different clients who have short position in that strike.

1 Like
4

Dear @MohammedFaisal @siva ,
It’s means there may be netted off and even may not be.
Am I right ?

5

Yes, if your short leg is CTM, it cant go either ways.