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 October-2021 expiry visit the ‘Profile’ section on your Upstox account on our App / Web and give your consent from here before EOD on Tuesday, 26th October 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 October 2021 expiry F&O contracts from Wednesday, 27th October 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, 26th October 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!

19th October 2021 is a settlement holiday on account of Eid-e-Milad. Due to this, all Equity trades placed on 18th and 19th October 2021 will be settled by 21st October 2021.

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+2 cycle because either the depositaries (NSDL and CDSL) are closed 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 19th October 2021?
On account of the settlement holiday on Tuesday, 19th October 2021 note the following impact:

1. All trades placed on 18th and 19th October 2021 in the Equity segment will be settled by 21st October 2021.
2. All trades placed on 18th October in the Derivative segment will be settled on 20th October
3. All shares bought on 18th October will be visible under T1 holdings on 19th October but you will only be able to sell them on 20th October
4. The credit bill amount for all segments on 18th October will not be available for trading or withdrawal purposes on 19th October 

Note: The credit bill for Equity segments on 14th October 2021 will also not be available for trading or withdrawal purposes on 19th October because 15th October 2021 was a trading holiday and 19th October 2021 is a settlement holiday.

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

On account of Dussehra, markets will be closed on Friday, 15th October 2021. Trading will resume on Monday, 18th October 2021.

MCX will be closed on Friday, 15th October 2021 for the morning session. The second session (5:00 PM to 11:30 PM) will take place as usual.

Please note: All fund withdrawal requests placed on Friday will be processed on Saturday, 16th October 2021.

We noticed some of our users are unable to transact on our platforms due to a browser related intermittent issue. To prevent this from happening, we request you to update your Chrome browser/Upstox app to smoothly continue with your transactions. Thank you for your patience.

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.