Rules for net-off of physical delivery obligation

F&O
1

For net-off of physical delivery obligation, (same expiry month)

  1. Short C.E and Short P.E, both positions have to expire ITM.
  2. Short P.E and Long C.E, Short P.E should expire ITM and Long C.E should expire OTM.
  3. Short C.E and Long C.E, Short C.E should expire ITM and Long P.E should expire OTM.
  4. Short P.E and Long C.E, short P.E ITM and Long C.E OTM.
  5. Short C.E and Long P.E, short C.E ITM and Long C.E OTM.

Is this understanding correct? Can someone please confirm?

2

Netting off is nothing but if you hold multiple F&O positions in the same stock and if the overall position in the account results in an equal quantity of both, give and take delivery, they are netted off.

Suggestion you to once check the net-off combinations from the Varsity link under 24.5 and if you have queries will revert back here and I’ll answer them.

1 Like
3

thanks, this helps

4

Does net-off take place if both the position have different expiry months? e.g. Short P.E ITM is of Dec and other short C.E ITM Jan month.

5

No, for net-off to happen, both positions need to be of the same expiry and should expire ITM.