Announcements

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Based on market feedback, NSE has announced the following changes on derivatives trading of FINNIFTY (Nifty Financial Services Index) from 14th October 2021:

1. Trading in Weekly Index Futures of FINNIFTY shall be discontinued. 

2. Revised expiry day of derivative FINNIFTY contracts will be as follows:

QUESTIONS YOU MAY HAVE

What is FINNIFTY?

FINNIFTY or Nifty Financial Services Index consists of 20 stocks, listed on the National Stock Exchange (NSE), it measures the behavior and performance of the Indian financial sector that includes banks, financial institutions, housing finance, insurance companies, and other financial services companies. To know more, click here.

What does this mean for existing and new contracts?

• On 14th October 2021 EOD, the expiry date of all existing contracts will be revised to Tuesday as mentioned above. For example any existing F&O contract expiring on 21st October 2021, Thursday will be revised to 19th October 2021, Tuesday.
• All new contracts introduced for trading on or after 14th October 2021 will be as per the revised expiry date(s) mentioned above.
• Trading in Weekly FINNIFTY Options contracts will continue to be available as per the revised expiry date(s). Only trading in Weekly Index Futures of FINNIFTY has been discontinued. 
• These changes do not affect any open positions you hold except the change in the expiry day of the contract. All other contract specifications remain the same.

To know more refer to the Exchange circular no. NSE/FAOP/49595 dated 15th September 2021.

SRF Limited (SRF) conducted a meeting with its Board of Directors on 31st August, 2021. As per this meeting, it has declared, to the Exchange, an issue of Bonus Shares in the ratio of 4:1. The record date for the issue of Bonus Shares is 14th October 2021.

What are Bonus Shares?
These are additional shares given by a company to existing shareholders for free as an alternative to distributing dividends.

How does this corporate action impact Futures & Options Contracts?

Impact on Futures Contract: 

• The adjusted base price shall be arrived at by dividing the old futures price by the adjustment factor.
• The adjusted market lot shall be arrived at by multiplying the old market lot by the adjustment factor. The revised market lot would be 625

Impact on Options Contract: 

• The adjusted strike price shall be arrived at by dividing the old strike price by the adjustment factor. 
• The adjusted market lot shall be arrived at by multiplying the old market lot by the adjustment factor. The revised market lot would be 625

Adjustment factor for the bonus issue of A: B is defined as (A+B)/B. In the case of SRF Limited, the adjustment factor is (4+1)/1 = 5, since the bonus issue ratio is 4

For all positions taken before 13th October 2021, you may see a slight deviation in the carried forward (c/f) average price of SRF due to the corporate action mentioned above.

To know more, read the circular here.

On account of Gandhi Jayanti, 2nd October 2021 is a bank holiday. Hence any withdrawal requests placed after 8:00 AM on Friday, 1st October 2021 will be processed on Monday, 4th October 2021. To know more about our withdrawal request timings, click here: https://help.upstox.com/support/solutions/articles/248578-how-much-time-does-it-take-to-process-my-withdrawal-request-

All open position(s) in the F&O segment with a 30-09-2021 expiry date (except those who have opted for physical settlement) should be squared off  before 12:00 PM on 30th September 2021 to avoid any further action by Upstox.

What does this mean?
In an 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 the physical delivery of stocks to settle the open transactions instead of settling them with cash.

Here’s an example – A trader bought futures for XYZ (lot size – 5000) at Rs. 100, so the contract value is Rs. 5,00,000. On expiry day, if the settlement price for XYZ is Rs. 102 and the contract has been settled on a cash basis, the trader will get a profit of Rs. 10,000. If the contract has not been settled, physical settlement takes place, which means the trader will have to pay an amount of Rs. 5,10,000 (as per settlement price of Rs.102, lot size 5000) and 5000 shares will be delivered to his Demat account as per the T+2 days settlement cycle.

As per our latest announcement mentioned here, we require consent in order to physically settle your transactions.

However, for all users who have not submitted consent and who do not square-off their positions before 12:00 PM on 30th September 2021 , then here’s what will happen:

A) Auto-square off by Upstox:

If users cannot square off your positions before the cut-off time (i.e., 12:00 PM on 30th September 2021), we will square them off at the prevailing market rates. Such square-off orders will be placed by our team as “Market Orders” and since order matching happens at the Exchange level, we shall not be liable for the rate at which they are executed.

B) Physical settlement by the Exchange:

If we cannot square off your positions due to market operational reasons, positions will be physically settled by the Exchange, and you will have to bear the costs (penalties & losses) arising from it. This means -

1. For a long open position (Long Futures, Long Call Options, Short Put Options)
   Your long open position will get converted into a ‘Buy Equity Delivery,’ and you will be liable to pay the entire settlement amount as the holder of the position.
2. For a short open position (Short Futures, Short Call Options, Long Put Options)
   Your short position will get converted into a ‘Sell Equity Delivery,’ and you as a holder of the position will be liable to deliver the shares; else, an auction process will be applicable.

To avoid this entire process, we recommend squaring off all open F&O trades before 12 PM on 30th September 2021.

Feel free to refer to the exchange’ circular  here.