Policy on settlement of compulsory delivery derivative contracts — Update Oct 2019

[Sriramoju_Shrikanth]

I Have 1 one lot of REC ltd of 80PE BUY & forget to close. Does it come to physical delivery? That which I have to any charges? Please help me. It is going to expire?@Nithin #zerodha @siva #trading:announcements

[ShubhS9]

If your 80 Put expires ITM you are obliged to deliver shares, If it expires OTM it will expire worthless and there will be no obligation. You can read more here.

[ShubhS9]

@Venkat_Krishnan

If I buy a deep itm call option, am I guaranteed delivery on expiry? E.g., if I buy 1 lot of icicibank 900ce and it expires at 1000, did zerodha or nse ensure that I get delivery of 700 shares as long as there is enough cash in my account?

Is there any chance that I may not get delivery and if so what happens?

Whether you get the delivery or not depends on whether the counter party—seller of Call option has sufficient shares in their demat account.

If the seller doesn’t hold enough shares, it will result in short delivery, in this case the exchange will hold a auction on T+1 day and will try to buy the shares in the market and deliver to you.

In case the exchange isn’t able to buy sufficient quantity in auction market, then the transaction is settled at close-out rate. In this case, you will get cash credited to your account. This post explains about short delivery in detail: Consequences of Short delivery - NSE/BSE – Z-Connect by Zerodha

[Venkat_Krishnan]

Got it, thanks!