Settlement of index options on Expiry

Upon expiry, if your Option expires OTM it will expire worthless, if your Option expires ITM, it will be settled at Intrinsic Value.

It will expire worthless and you will lose the premium paid to purchase the Option, there are no additional charges.

If your Option expires ITM, it will be settled at Intrinsic Value, and for this there will be additional STT charged at 0.125% on Intrinsic Value of the Option.

Eg. You bought 11500 CE and Nifty expired at 12000, your Option will have Intrinsic Value of 500 (12000 - 11500), on this 500 there will be additional STT of 0.125% ie. 46.875 (500 * 0.125 / 100 * 75 (Lot Size)).

If you are Short and your Option expires ITM, there is no additional STT as you have already paid it when you sold the Option.

4 Likes