Announcements

As per a SEBI mandate, physical settlement is compulsory if a trader holds a position in any Stock F&O contracts on expiry date.

What is Physical Settlement?

In a Stock F&O contract, when there is an open position that has not been squared off by its expiry date, Physical Settlement takes place. This implies they have to physically give/take delivery of Stocks to settle the open transactions instead of settling them with cash.

Examples of physical settlement:

Futures

Long positions of 1 lot of Reliance, 250 quantity at Rs. 2000 i.e. Rs. 5 lakh contract value

F&O = 20% charges i.e. Rs. 1,00,000. This means, you are required to give Rs. 1 lakh, but if you decide to physically settle then you need to have a complete contract value of Rs. 5 lakhs.

Short positions of 1 lot Reliance 250 quantity at Rs. 2000 i.e. Rs. 5 lakh contract value

F&O = 20% charges i.e. Rs. 1,00,000. This means, you are required to give Rs. 1 lakh, but if you decide to physically settle then you need to have the holdings of 250 quantity of Reliance and Rs. 1 lakh margin money till expiry date.

Options

Long - 1 lot of Reliance, 250 quantity for strike price of Rs. 2000 Call (CE) Options.

If the underlying price of Reliance is greater than the strike price of Rs. 2000, then the contract is said to be ITM (In-The-Money). If you wish to go for physical settlement, you need to maintain a free ledger balance of Rs 5 Lakh in your account, else physical settlement would not be done.

Long - 1 lot of Reliance, 250 quantity for Strike price of Rs. 2000 Put (PE) Options.

If the underlying price of Reliance is lesser than strike price of Rs. 2000, then the contract is said to be ITM (In-The-Money). If you wish to go for physical settlement, you need to provide the Stocks (shares) equal to the lot quantity positioned to be available in Demat account, else physical settlement would not be done.

Please note -- 

• 🔹 Short ITM PE options, treatment would be similar to Long ITM CE options.
  Free ledger balance equal to the contract value to be maintained.
• 🔹 Short ITM CE options, treatment would be similar to Long ITM PE options.
  Holdings shares of lot quantity positioned to be available in Demat account.

What is the process for Physical Settlement on Upstox?

To opt for physical settlement on Upstox, you need to provide your consent first and here are the details for the same:

• 🔸 To provide your consent for physical settlement of open Stock F&O contract(s) with December 2023 expiry visit the ‘Profile’ section on your Upstox account on our App / Web and give your consent from here before EOD on Tuesday, 26th December 2023.
• 🔸 Based on your consent, Upstox will evaluate whether your position qualifies for physical settlements and if there is sufficient  ledger balances / holdings (whichever applicable) is available.
• 🔸 Kindly, plan your trades keeping in mind that you will not be able to trade in fresh positions in the current December 2023 expiry F&O contracts from Wednesday, 27th December 2023 onwards. 
• 🔸 Correspondingly, position conversion(s) on carry forward of any stock futures positions shall also not be permitted.

What other impact could this have on your positions?

Your position will automatically be squared-off on expiry day at 12:00 PM in case:

• 🔸 You have not provided your consent for physical settlement
• 🔸 You provided your consent for physical settlement and do not have Ledger Value (equal to contract value) / holdings available for the physical settlement of your positions.
• 🔸 In a case of funds / holdings not being available for all the open positions, we will execute square offs for all the positions. Thus no partial funds / holdings evaluation for the expiring positions will be considered by our team.

What else to keep in mind?

Delivery margins would be applicable as per Exchange norms on all the existing long ITM (In The Money) stock option positions in a staggered manner as explained below:

• 🔹 10% of delivery margins computed on expiry -4 days EOD (Friday)
• 🔹 25% of delivery margins computed on expiry -3 days EOD (Monday)
• 🔹 45% of delivery margins computed on expiry -2 days EOD (Tuesday)*
• 🔹 70% of delivery margins computed on expiry -1 day EOD (Wednesday)*

• 🔸 To avoid margin shortages, Upstox would be blocking such (above mentioned) delivery margins from Beginning of the Day (BOD) instead of End of the Day (EOD).
• 🔸 If the positions are not squared off for any reason (e.g: non-liquidity), then the contract would have to be settled physically and you would be liable to pay the entire amount of the settlement.

* If you have opted for physical settlement, you would be required to fulfil the entire funds (contract value) / holdings requirement by EOD on Tuesday, 26th December 2023.

In case of spread contracts, you are advised to provide margins for both the legs  since the risk of one leg square off by you anytime would result in physical settlement of the other leg.

Brokerage in Physical settlement:

Since there is a substantial increase in effort and risk to settle these F&O positions resulting in physical delivery, if F&O positions result in physical delivery brokerage will be 0.25% of the physical settled value. For all the netted off positions brokerage will be 0.1% of the physical settled value. All physical settled contracts (Futures & Options) will also carry an applicable Exchange charge.

And that’s all. Keep a watchful eye on this page for more updates from Upstox!

On Account of Christmas, Monday, 25 December 2023 is a Trading Holiday.

Due to this, keep the following impact in mind: 

🔸 Equity, Derivative and Commodities (both session) Markets will be closed on Mon, 25 Dec

🔸 Trading will resume on Tues, 26 Dec

🔸 No fund withdrawals will be processed on  25 Dec

🔸 Standard Fund Withdrawals after 8 AM on 22 Dec will be processed on 26 Dec

🔸 Instant Withdrawal facility will be available on 22 Dec,  read more

All ITM Crude Option contracts on 14th DECEMBER 2023 will be converted into Futures contracts. 

To avoid square-off, ensure that you maintain sufficient margin for the Future contracts before 10.00 PM today.

The TCS (Tata Consultancy Services) buyback offer at ₹4150 per share opened on 1st December 2023 and closes on 7th December 2023.

What is a buyback and why should you opt for it?

Its a corporate action where a company offers to buyback its shares from the existing shareholders usually at a higher price than the market price.

To learn more about a buyback, click here.

What does this mean for TCS shareholders?

Existing TCS shareholders holding TCS shares as of 25th November 2023 (which is the record date) can offer to sell their shares back to TCS for ₹4150 per share by applying to their buy-back offer on or before 7th December 2023.

How to apply for a buyback?

• 1️⃣ Login to the Upstox app using your 6-digit PIN or biometrics
• 2️⃣ Go to Account → Profile → My Account → Actions → Corporate Actions → Buyback
• 3️⃣ Select the required stock for buyback
• 4️⃣ Enter the quantity and click on apply
• 5️⃣ If you have submitted your POA or enabled DDPI, then the buyback will be auto confirmed

OR

If you are applying via a CDSL TPIN, click on ‘Continue to CDSL TPIN’ . If you do not have a TPIN, scroll down and select ‘Generate TPIN on CDSL’. Enter the TPIN and approve the transaction. Your buyback order will be confirmed and you can check the  order status  under the ‘Orders placed’ tab 

If you’re using an old Upstox app, click here:  How to apply for Buy-backs/Takeover/Delisting?

When can you apply?

Apply for this buyback before 7th December 2023

What to keep in mind while applying?

• 🔹 You can only apply for this buyback if you hold shares of TCS in your Demat account as on 25th November 2023 
• 🔹 You shouldn’t sell these shares on or before 7th December 2023 if you’re interested to take part in the buyback offer
• 🔹 After applying and offering your shares up for a buyback, you cannot sell them in the market and modify or cancel your original bid
• 🔹 You can only sell these shares in the market If the company cancels the buyback and you receive your shares back from the company
• 🔹 You will receive the buyback amount for the shares from TCS/ Registrar & Transfer Agent (RTA) directly into your bank account (this will be updated in the records of the depository as well).
• 🔹 A total of 4,09,63,855 shares will be accepted by TCS for the buyback and the remaining shares not accepted by TCS will be returned back to shareholders in their Demat account. 
• 🔹 On 14th December 2023, TCS will credit the payment for the accepted shares and the unaccepted shares will be returned to the user's demat accounts. The percentage of shares accepted will be decided based on the number of retail investors who have applied for the buyback. 

That’s all about the TCS buyback, stay tuned for more buyback updates from Upstox!

All ITM Natural Gas Option contracts on 23rd November 2023 will be converted into Future contracts. 

To avoid square-off, please maintain sufficient margin before 10.00 PM today.