Suppose on expiry day, traders ( Nifty Futures) who are short in the market, doesn't cover their shorts and let it expire then what will happen?

1.) What will happen If they don’t close-off their positions, does it mean that just Mark to Market Loss/Profit will get adjusted itself at the end of the day?

2.) And it also mean that there will not be any short covering rally…Right? (Because no shorts were closed, just got expired)

  1. If it’s futures, it gets MTM’ed and the resultant sum is debited - credited from your account. If it’s options, you get the closing price credited to your account if you’re long.

  2. Yes, could happen, but then remember for every guy short, there’s someone who is long :slight_smile:

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Thanks a lot Venu for clearing my doubt.