As F&O contracts approach their expiry date, the margins required
for these contracts increase to align with the contract value. This is because
physical settlement involves the actual delivery of the underlying stock,
necessitating higher margins to cover potential obligations.
Specifically, margins for F&O trades increase:
Four days before expiry (from the previous week's Friday to the expiry day) for
open in-the-money (ITM) long options positions.
Our margin policy
Day (BOD-Beginning of the day) Margins applicable
E-4 Day (Friday) 10% of VaR + ELM +Adhoc margins
E-3 Day (Monday) 25% of VaR + ELM +Adhoc margins
E-2 Day (Tuesday) 45% of VaR + ELM +Adhoc margins
E-1 Day (Wednesday) 70% of VaR + ELM +Adhoc margins
Expiry Day (Thursday) 100% of VaR + ELM +Adhoc margins
On the day of expiry, customers have until 12:00 PM to mark their Stock Futures
and In-the-Money (ITM) Stock Options for physical settlement via the mobile
application.
If not marked by 12:00 PM, the positions will be squared off by the RMS team on
a best-effort basis post 12:00 PM.
Steps to mark for physical delivery (Mobile App):
Log in to the 5paisa Mobile App
Go to Stocks > Book > Positions
Tap on the position you wish to mark
Select Mark for Physical Delivery
Important Notes:
This option is available only on the expiry day.
Due to market volatility, Out-of-the-Money (OTM) contracts can become ITM by
expiry. Therefore, we allow 5% OTM contracts to be marked for physical
settlement.
If not marked, even such OTM contracts within the 5% range will be squared off
by us to avoid delivery obligations.