12. Physical settlement of futures and options

[@rakshitha2244]

Just 17 years your teaching is very good completing your all 5 modules

[@rajakumar-gh3fd]

please clarify the following doubts. Case(i) I am a buyer holding ITM stock option Puts (ie., put buyer) and also long FNO positions on expiry. As you have explained the positions match and should neutralise and squared off on the expiry day. But my broker disputed and insisted on squaring up both the positions stating that being a ITM put holder, I have to give delivery at the first instance and the seller of puts and FNO ( the person who sold to me) are two different persons and hence it may not match and position would NOT be squared off automatedly similar to intra day trading resulting in delivery, penalty issues. Case (ii) If a buyer holding ITM stock option( both calls and puts) prefer to exercise shall it be refused by the seller. (ie who holds the ultimate right, the seller or the buyer in case of ITM options) and case (iii) so far we have discussed the right of ITM option holder. What is the right of long/short FNO position holder. Shall it be disputed and settled by the counter party and settled for cash? What is the effect of Do not exercise in this case? since buyer and seller in FNO has equal rights in this case

[@mihirkumar2887]

What happens if some one holds one ATM call long and 2 otm call short and 1 otm call as hedge AKA butterfly and the market moves up and it is traded AT the OTM strike how the settle ment will be ?

[@durgadas9066]

Sir how to exercise not to exercise option to take delivery or give delivery in zerodha?

[@rajakumar-gh3fd]

please clarify the following doubts. Case(i) I am a buyer holding ITM stock option Puts (ie., put buyer) and also long FNO positions on expiry. As you have explained the positions match and should neutralise and squared off on the expiry day. But my broker disputed and insisted on squaring up both the positions stating that being a ITM put holder, I have to give delivery at the first instance and the seller of puts and FNO ( the person who sold to me) are two different persons and hence it may not match and position would NOT be squared off automatedly similar to intra day trading resulting in delivery, penalty issues. Case (ii) If a buyer holding ITM stock option( both calls and puts) prefer to exercise shall it be refused by the seller and case (iii) What is the right of long/short FNO position holder. Shall it be disputed and settled by the counter party and settled for cash?

[@Super.normalkid]

these videos are very helpful . thanks sir

[@KBBhandage]

If I buy ce ATM within minutes it becomes ITM. Now I m in profit, so I close/square off my trade . All within minutes(30min). Now it's all settled or what?

[@hello2020]

I'm searching for just one thing regarding this topic and even Zerodha varsity doesn't clarify that. Suppose an option expires OTM and we have either stock in our demat or the cash to buy in our trading account. Then do we need to initiate any action or the process of take or give delivery happens from the side of broker ?

[@1985mohez]

You don't have to do anything if your option expires otm

[@shantaramnarse2155]

Sir i have bought a stock options of the tata motor at pe bye 5 and it got hit stop loss before the expiry do i need to give the delivery of the stock ie is physical settelment

[@hariprasadaraodevabathini3549]

Sir, some changes made from 28th April, 2022 know. Can you please throw some light on it

[@trakba]

How do we know what price one could get for a stock in the auction market ?

[@WH_lines]

Can we sell the contact in the market before expiry?

[@ramkumar-lc1st]

Yes always

[@sajiths2246]

Sir, if I have a long put option and long call option of a stock then what is the margin for expiry day.

[@Sree.M]

Thank you. Very useful info.

[@krishnaaskr]

Sir, how physical settlement of index options work? Can you plz make a video on it

[@varsitybyzerodha]

Hey Kittu, Index Futures and Options (Nifty, Bank Nifty, FINNIFTY, and Nifty Midcap Select) are cash-settled, there will be no physical settlement.

[@kunalarora5841]

Incase of writing a put option, suppose i write a put option reliance for 2840 and if the put expires itm, so will have to but it from the put buyer in this case. Now i see the contract for options on reliance is 250 so does this mean i have to buy 250 shares from the put buyer?

[@ranjancom2000]

same question for me also, will i need keep cash to buy 250 qty stocks or i need to pay only the LOSS amount

[@harshaldeshpande8869]

What happens to Indices expiry? Will I get nifty stock? 🤔🤔🤔

[@varsitybyzerodha]

Index F&O are cash settled, Harshal.

[@SudhanwaDeo]

is early excercise possible fo indian stock options ?

[@priyanshu1265]

Yes exit before expiry day.

[@chinmey_0147]

Great content

[@Ashish36821]

I have a question. I will be glad if you could answer that. As per varsity lectures on OPTIONS, I found 2 things which contradicts each other. Please clarify that if possible. (Taking CALL OPTION as example) 1. Option buyer will exercise his right only if the price of underlying crosses the strike + premium. 2. Pay off charts (for option sellers) show that premiums keep going down by the amount of IV and will start incurring losses after breakeven. My question is - If buyer exercises right only after price crosses strike+ premium, THEN HOW COME OPTION SELLER WOULD LOSE PREMIUM TILL BREAKEVEN??? I hope I am able to frame my query properly. Kindly solve my query sir. Thanks & Regards ASHISH JAIN

[@murugeshanswamy3976]

superb

[@sha.shankz]

Hiii

[@Abhisheksinghcharan7]

Settlement has been abolished by sebi kindly update yourself zerodha

[@v_srini]

thanks

[@sagargudekote8131]

test

[@sagargudekote8131]

test