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 March 2023 expiry visit the ‘Profile’ section on your Upstox account on our App / Web and give your consent from here before EOD on Monday, 27th March 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 March 2023 expiry F&O contracts from Tuesday, 28th March 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, 27th March 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!

22nd March 2023 is a settlement holiday on account of Gudi Padwa. Due to this, all Equity Delivery orders placed on 21st March and 22nd March 2023 will reflect in your Demat account on Thursday 23rd March 2023.

To help you understand what this means, we’ve simplified the details below.

What’s a settlement holiday?
Settlement holidays are when markets are open but settlement of your trades do not take place as per the usual T+1 cycle because either the depositaries (NSDL and CDSL) or banks are closed on that day.

How does this holiday impact your trades?
Since the settlement date denotes the final transfer of ownership of shares and not the day you made the trade, a holiday in between causes a delay in the final transfer of shares.

What will be the impact of the Settlement Holiday on 22nd March 2023?
On account of the settlement holiday on 22nd March 2023 kindly note the following impact on your holdings:

• - All trades placed on 21st and 22nd March in the Equity and Derivative segment will be settled on Thursday, 23rd March
• - All shares bought on 21st March will be visible under T1 holdings on 22nd March but you will only be able to sell them on 23rd March
• - The credit bill amount for all segments on 21st March will not be available for trading or withdrawal purposes on 22nd March because this amount will be blocked for one day due to the settlement holiday

You can also check a list of future settlement holidays here:

Settlement Holidays 2023

If you have any queries, you can raise a ticket on the Upstox Mobile or Desktop app.

Happy Trading,
Team Upstox

All ITM Crude Option contracts on 16th March 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.

Nomination is an important aspect of managing your account in your absence, whether it's your bank account, trading account or Demat account.

Why should you add a Nominee?

A nominee is the person or person(s) you legally appoint to own your shares in your absence.

• 🔸 Adding a nominee can provide peace of mind knowing that your loved ones will be taken care of in case of an unfortunate event
• 🔸 It can help avoid potential disputes among your heirs about who should inherit your assets
• 🔸 Saves your loved ones from having to go through tedious paperwork to access your assets in case of your death

How can you add a nominee to your Upstox Demat+Trading account?

• - Log in using your 6-digit PIN or Biometrics
• - Click on 'Account' and then 'Profile'
• - Click 'My nominees' under 'Profile'
• - You will be redirected to the 'Nominee details' page, where you will click on 'Add nominee' or 'Opt-out' 
• - Fill in the nominee details and then click on 'Continue'
• - Upload an ID proof of the nominee
• - Once the documents are uploaded, enter the 'Nominee share in %' you want to give to that nominee. You also have the option to add up to 3 nominees to your account. 
• - 'eSign with Aadhaar OTP.' You can eSign if your mobile & Aadhaar are linked.

To know the detailed steps to add/update your Nominee, read this blog.

Kindly ensure you add/update your Nominee by 15th May 2023.

On account of Holi, keep the following in mind:

• - Markets will be closed on Tuesday, 7th March 2023. Trading will resume on Wednesday, 8th March 2023
• - MCX will also be closed on Tuesday, 7th March 2023 for the morning session. The second session (5 PM - 11:30 PM) will take place as usual.
• - All fund withdrawal requests placed on Tuesday, 7th March 2023 will be processed on Wednesday, 8th March 2023.
• - The credit bill amount for equity segments on 6th March will not be available for trading or withdrawal purposes until 7th March 2023.
• - The credit bill for F&O and MCX segments on 6th March will not be available for trading or withdrawal purposes until 7th March 2023.