What is 5Paisa's policy on the physical settlement of equity derivatives on expiry?

What is 5Paisa's policy on the physical settlement of equity derivatives on expiry?

·        Yes, physical settlement can occur without cash, but LiquidBees are pledged. The entire margin can come from LiquidBees as they are considered cash equivalent. This margin cannot be used to settle your losses or charges from the trade. 

·        Moreover, the physical settlement of open F&O stock positions can be physically settled to demat accounts.


·        Note: Traders should review the terms and conditions for specific guidance on how pledged assets are treated in the event of option exercise and settlement.



    • Related Articles

    • What is the concept of Physical Settlement in Equity Derivatives?

      The concept of physical settlement in equity derivatives was introduced by SEBI in July 2018 and made mandatory from October 2019 expiry onwards all the stocks. F&O physical settlement was introduced because Indian derivatives markets are one of the ...

    • What is Physical Settlement in Equity Derivatives (Futures & Options) and How to Place Order in 5paisa?

      The physical settlement means if you hold a position in any Stock F&O contract, at expiry, you will be required to give/take delivery of stocks. The physical settlement is restricted only to stock derivatives. Physical settlement of index options is ...

    • Why Purchasing Stock Options Near Expiry is Restricted?

      Buying new or long positions in out-of-the-money (OTM) stock options during the final two days before expiry (specifically on Wednesday and Thursday) is prohibited. This restriction is in place because such contracts may be subject to physical ...

    • What is Delivery Margin on Physical Settlement?

      The stocks that have been identified for physical settlement would attract the delivery margin as is currently being done in the Capital market segment. These margins will be part of the initial margin that would be additionally collected by the ...

    • What is physical settlement in MCX?

      The Multi Commodity Exchange of India (MCX) offers physical settlement for certain commodity futures contracts. Physical settlement means that upon the contract's expiry, the seller must deliver the actual commodity, and the buyer must take delivery ...