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:

Future

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.

Option

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 November-2021 expiry visit the ‘Profile’ section on your Upstox account on our App / Web and give your consent from here before EOD on Tuesday, 23rd November 2021.
• 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 November 2021 expiry F&O contracts from Wednesday, 24th November 2021 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 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, 23rd November 2021.

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!

We are conducting a scheduled upgrade & maintenance activity on 13th November 2021 from 5.30 AM to 7.00 PM to ensure that you can enjoy a seamless trading and investing experience on Upstox. During this time you may not be able to login to the Upstox mobile app & desktop platform. Thank you for your patience.

The Indian Hotels Company Limited (INDHOTEL) conducted a meeting with its Board of Directors on 23rd August, 2021. As per this meeting, it has declared to the Exchange that it will announce a rights issue  in the ratio of 1:9, i.e 1 rights equity share for every 9 equity shares held at an issue price of ₹150 per equity share. The record date for the purpose of determining the shareholders who will be eligible to apply for the rights shares is 13th November 2021.

What is a rights issue?
A company announces a rights issue to invite existing shareholders to buy more shares, usually at a discounted price. These shares are known as rights equity shares.  To learn more, click here.

How does this corporate action impact Futures & Options Contracts?

Impact on Futures Contract: 

• The adjusted futures base price shall be arrived at by multiplying the old futures base price by the adjustment factor. 
• The adjusted market lot shall be arrived at by dividing the old market lot by the adjustment factor. The revised market lot would be 4022

Impact on Options Contract: 

• The adjusted strike price shall be arrived at by multiplying the old strike price by the adjustment factor.
• The adjusted market lot shall be arrived at by dividing the old market lot by the adjustment factor. The revised market lot would be 4022

The details of the adjustment factor computation and revised option strike prices available for trading INDHOTEL from 12th November 2021 are given in Annexure-1 of the circular here.

For all positions taken before 11th November 2021, you may see a slight deviation in the carried forward (c/f) average price of INDHOTEL due to the corporate action mentioned above.

As per a recent update, all RIL partly paid-up equity shareholders as on record date 10th Nov’21 need to pay the second & final call of ₹628.50 per partly paid-up equity share between 15th Nov’21 to 29th Nov’21 (both days included).

If they do not wish to pay this amount then they can sell their partly paid-up equity shares by 8th Nov’21 as the shares will be delisted after this date.

How to make the payment of ₹628.50 per partly paid-up equity share?
You can make the payment online or offline after the window to pay the second and final call opens on 15th Nov’21. We will update you on the process once the window opens.

What happens in case of a delayed or non-payment of ₹628.50 per partly paid-up equity share?
As RIL partly paid-up equity shares will delist after 8th Nov’21 if you delay your payment or do not pay ₹628.50 per partly paid-up equity share, your rights to existing partly paid-up equity shares including the amount already paid will be forfeited.

What are partly paid-up equity shares?

These are shares in a company which have only been partially paid for and as the company requires more funds, calls are made from time to time from the holder of such partly paid-up shares until the shares are fully paid-up. Once fully paid-up no further call would be made towards such shares.

For more information, you can refer to the company circular here: https://www.bseindia.com/xml-data/corpfiling/AttachHis/135a796c-4ef0-4851-a3f3-b552eeb4b101.pdf 

Stay tuned for more updates from Upstox! 

On account of US daylight saving timings, the trading hours for all commodities have been revised as follows:

All MCX Intraday position square off timings will be 11:25 PM. 

These revised timings will come into effect from 8th November 2021. 

To know more, please refer to the MCX circular: https://www.mcxindia.com/docs/default-source/circulars/english/2021/october/circular-646-2021.pdf?sfvrsn=57302391_0 

Also note that on account of Diwali,

1. MCX will be closed on Friday, 5th November 2021 for the morning session. 

2. The second session (5:00 PM to 11:30 PM) will take place as usual.

3. Credit bill of MCX segment on 3rd and 4th November will not be available for trading on 5th November 2021