What happens if I don't square off my positions in options?

Your account will go in debit balance. You are required to bring in funds if your account results in a debit balance after physical delivery failing which the delivered shares will be liquidated to make good of the debit balance. Interest will be charged at 0.05% per day on the debit balance in the account. Explained here.

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When we buy an option at Rs.100 and on expiry the LTP is 130. But I do not exit the option as the buyer is sitting at 90, so I do not want to book a loss. As it is expiry, the intrinsic value is 130 (but no buyer is there).
Now, the next day, will the exchange give me Rs.30 by closing my position based on Intrinsic value in my account or deduct some extra charges? Or the exchange will treat my position as if I sold to a guy at 90 and make my profit making position into a loss one?

if I do not do anything, will exchange charge me 20% of the LTP or more for not exiting my position on the expiry?

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Have explained all the scenarios above in detail:

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Thank you. Say, if I have 16000 PE and market expires at 15900.
Intrinsic Value will be Rs.100.
Will the STT then be Rs.12 only. So, I will receive 100-12 = Rs.88 back?

And I assume that Rs.20 will not be charged by Zerodha as I did not sell to another buyer but let my option expire for the exchange to take care of?

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The STT will be Rs. 6.25 (100 * 50 * 0.125 / 100). You’ll receive Rs. 100 * Lot Size, the charges will be deducted from your account balance.

If your position expires ITM, brokerage charges will be applicable. If it expires OTM, it’ll expire worthless and brokerage will not be applicable.

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Ideally . Brokerage should not be charged . As i have not excercised / exit / squareoff the trade position !!!

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Thanks so much.

@ShubhS9

I have the following Stock options contracts on Polycab with an expiry date of 30th Sept. Could you please explain

  1. the margin implications as we enter the last week of expiry?
  2. What if I don’t close any of the contracts and let them expire, and the spot price closes (a) below 2400 (b) above 2500?
  3. on a net basis, i am short on 1 lot of Put option on Polycab, so if I don’t close the contracts, will i be obliged to buy 300 qty of Polycab?
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Margin for Long ITM Options will increase in phased manner from expiry minus 4 days as exchange blocks physical delivery margins as a percentage of applicable margins of the underlying stock.

For Short Option position the margin requirement will increase to 40% of the contract value or SPAN + Exposure margin (whichever is higher).

Can you share details on which strikes you are holding?

Yes, if your position expires ITM, you will have to take delivery of underlying shares. You can learn more on physical settlement here.

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@ShubhS9 thank you for the quick response. I hold the following open contracts

Polycab Sep 2400 PE - Short 3 lots (900 qty)
Polycab Sep 2500 CE - Short 2 lots (900 qty)
Polycab Sep 2600 CE - long 3 lots (900 qty)
Polycab Sep 2620 CE - Short 3 lots (900 qty)

You can refer to this table to understand how the net-off scenarios work. Also, do go through the article shared above for more information:

TH4JQCYS_Screenshot_208

From second leg , we have to select any one?

Yes.

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@ShubhS9 @siva Is real time combined market wide position of a Fno stock available in zerodha or NSE website or some other site?
please help, thanks

hi @nithin can u help @ShubhS9 @siva Is real time combined market wide position of a Fno stock available in zerodha or NSE website or some other site?
please help, thanks

Hey @ad9, sorry missed this. Siva had answered a similar query some time ago here:

You can check out the latest MWPL limits on the margin calculator page here.

Can you please clarify this ,
For example:-
CASE 1 : I positional short sell NIFTY 12000 PE when NIFTY is 15800 . If I don’t square off before expiry, What will happen during expiry?
CASE 2 : I positional short sell NIFTY 12000 PE but before expiry or during expiry if liquidity dry up in NIFTY 12000 PE(no buyers are present to buy my option) what will happen in this situation? It will automatically square off?
CAN YOU PLEASE CLEAR MY QUERY REGARDING THIS . THANK YOU

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If Nifty expires above 12000 PE, nothing happens. You get to keep the premium you have collected.

if your position is In the money, then if you dont square of, your position will be settled at intrensic value, Liquidity or No liquidity, if the position is OTM, then that option expires wothless, and you get to keep the premium

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premium+option selling amount will be credited or not in my account if I won’t get to square off in NIFTY 12000PE which is otm?

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If you’ve shorted the 12000 PE, you would’ve already received the premium when short position was taken. Upon expiry, as the option is OTM, it’ll expire worthless and you’ll get to keep the entire premium recieved.