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 Mar 2024 expiry visit the ‘Profile’ section on your Upstox account on our App / Web and give your consent from here before EOD on Tuesday, 26 Mar 2024.
• 🔸 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 March 2024 expiry F&O contracts from Wednesday, 27 March 2024 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, 26 March 2024.

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!

All ITM Crude Option contracts on 15th March 2024 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.

On Account of Mahashivratri, Friday, 8 Mar 2024 is a Trading Holiday. 

Due to this, keep the following impact in mind: 

🔸 Equity and Derivative Markets will be closed on Fri, 8 Mar

🔸 Trading will resume on Mon, 11 Mar

🔸 Fund withdrawals will not be processed on 8 Mar

🔸 Standard Fund Withdrawal requests placed after 8 AM on 7 Mar will be processed on 11 Mar

🔸 Instant Fund Withdrawal facility will be available on 7 Mar, read more

🔸 Commodities Market will be closed for the morning session on Fri, 8 Mar

🔸 Commodities Market’s second session (5 PM - 11:55 PM) will take place as usual 

Due to Daylight Saving Time in the USA, trading hours for all commodities have been revised:

All MCX Intraday positions will be squared-off at 10.55 PM from 11th March 2024.

You can refer to the exchange circular here.

As per a recent update from the Reserve Bank of India (RBI) regarding customers with a Paytm Payments Bank (PPB) account, here are a few important things you must keep in mind which will come into effect from 10 March 2024:

- Upstox will no longer accept payments or mandate requests through PPB
- If PPB is your Primary bank account on Upstox, you will no longer be able to use it to add or withdraw funds
- If you have a Secondary bank account other than PPB, we will mark your Secondary account as your Primary account
- Mutual Fund transactions after 10 March 2024 will no longer be processed through your PPB account
- You will not be able to add PPB as a new bank account on Upstox
- Existing SIPs till 10 March will remain unimpacted

What You Can Do:
1) If PPB is your current Primary bank account on Upstox:
- Add a new bank account by following these steps:  How do I add a new bank in my Upstox account?
- Make the newly added bank account as your Primary bank account by following these steps: How do I change my Primary bank account linked to my Upstox account?

2) If your Mutual Fund SIPs are via PPB and it’s the only Primary bank account:
- Add a new bank account by following these steps: How do I add a new bank in my Upstox account?
- Stop your existing SIP by following these steps: How do I stop my mutual fund SIP at Upstox?
- Create a fresh SIP with the new bank account.

3) If your Mutual Fund SIPs are via PPB and you already have a Secondary bank account on Upstox:
- If you have any other bank mandate available, we will migrate your existing SIP to that mandate
- If you don’t have any bank mandate available, we will transfer your SIPs to your Secondary bank account and you will receive a mandate approval email. Please approve the mandate by following these steps:

• -> Click on ‘Click here’ or ‘Approve Mandate’ as per your email
• -> Select a verification method (NetBanking / Debit Card)
• -> Agree with the ‘Terms and Conditions’
• -> Approve using NetBanking or Debit Card details
• -> Your mandate will be approved within 5 working days.
• -> We will link your SIP to the approved mandate.

These changes are designed to ensure compliance with the latest RBI directives and to maintain the integrity of your transactions on Upstox. You can refer to the RBI FAQs here: Reserve Bank of India - Frequently Asked Questions.