Announcements

Due to a merger between HDFC Ltd. and HDFC Bank Ltd., the scrip ‘HDFC Limited’ will no longer be available for trading under the Equity Derivatives (F&O) segment. Keeping this in mind, please take note of the following:

-HDFC Ltd. will be delisted on 13th July 2023

-A day prior to this date i.e. on 12th July 2023 all existing HDFC Ltd. open contracts with expiry of July 2023 , August 2023 and September 2023 contracts will automatically expire and physical settlement will be applicable 

-If you wish to opt for physical settlement, please ensure you have the required funds/stock by 10th July 2023.

-If fund/stock requirement for physical settlement is not available, we will square-off existing positions after 10 AM on 12th july

-No fresh positions will be allowed from 11th July 2023, onwards.

-Collateral Margins (Margin Pledge) on HDFC Ltd. won’t be available from 7th July 2023 onwards

-Please review your positions and take necessary actions accordingly

This as per an Exchange circular no. NSE/CML/57423 on 4th July.

As per SEBI’s circular, all brokers need to settle accounts of all clients on the first Friday of every quarter i.e. October 2022, January 2023, April 2023, July 2023 and so on. If the first Friday is a trading holiday, then such settlement shall happen on the previous trading day.

What does this mean

-This will have no impact on your existing orders, holdings or positions 

-All unutilised funds from your Upstox account will be transferred back to your registered bank account by Friday, 7th July 2023

-However, due to the large volume of transactions on Friday, 7th July there might be a delay from the bank in receiving your funds. Don’t worry, in this case you will receive your funds within 2 working days

What should you do

-For uninterrupted trades, keep your Upstox account funded before trading starts on Monday, 10th July 2023

-You can transfer funds from your registered bank to Upstox via NetBanking, UPI, Google Pay or NEFT/RTGS/IMPS. 

-For more detailed steps, click here: How can I transfer funds? . 

-If you’re using NEFT/RTGS make sure you add Upstox as a beneficiary 24 hours in advance (by Friday, 7th July). Beneficiary details are:

For Securities:

Bank Name - HDFC Bank

Account Name - RKSV SECURITIES INDIA PVT.LTD.

Account Number - 00600340067574

Account Type - Current Account

IFSC Code - HDFC0000060

For Commodities:

Bank Name - HDFC Bank

Account Name - RKSV COMMODITIES INDIA PVT.LTD.

Account Number - 15770340022236

Account Type - Current Account

IFSC Code - HDFC0000060

We hope this helps you plan your trades better! 

As per the Exchange circular, the lot size of BANK NIFTY is being revised from 25 to 15 and here’s what you need to know.

• - Contracts after June 2023 monthly expiry  will have revised market lot
• - The lot size of all existing BANKNIFTY long term option contracts (with expiry of over 3 months i.e Sept ‘23, Dec ‘23, Mar ‘24) shall be revised from 25 to 15 after expiry of June 2023 contracts (i.e. June 30, 2023)

What does it means for you:

If you have an open position in BANKNIFTY in Sept ‘23, Dec ‘23, Mar ‘24 expiry date, you will have to do one of the following before 30th June 2023: 

• - Convert the position into multiples of 15
• - Have position(s) in multiples of 15 - here your current 3 lots (25 x  3 = 75) will then become 5 lots (15 x 5 = 75)
• - Square off the existing position, if it is not in multiples of 15

If your remaining quantity is not in multiples of 15, you will not be able to square off your position and they will expire worthless. 

Kindly plan your trades accordingly. You can also get more details by reading the circular here: 

NSE/FAOP/56233

Looking for more information? Learn more about lot sizes and what they mean here.

All ITM Natural Gas option contracts on 23rd JUNE 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.

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 June 2023 expiry visit the ‘Profile’ section on your Upstox account on our App / Web and give your consent from here before EOD on Monday, 26th June 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 June 2023 expiry F&O contracts from Tuesday, 27th June 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 Monday, 26th June 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!