SAMCO Policy for Physical Settlement of F&O Contracts

Derivative Contracts in India are currently “Cash Settled” on the day of expiration. Suppose you have bought 1 lot of XYZ Stock future, comprising of 1000 shares, at Rs. 500 and on the day of expiry you did not square off the same and the contract expired at Rs. 505. Now, on expiration you will get Rs. 5 * 1000 shares = Rs. 5000/- as profit. There was no need to pay the full amount of buying the stock i.e. Rs 1000 * 500 = Rs. 5,00,000/- (5 Lakhs) and there was no need to take the delivery of shares. Vice versa, if you had sold the future contract, you would only have to pay the loss of Rs. 5,000/-. There was no need to actually give the delivery of shares and collect the amount equivalent to the value of shares.

However, this changed for 46 F&O contracts due to an NSE circular dated April 23, 2018 . Now these 46 Stocks would have to be physically settled from July expiry day i.e. 26th July 2018 onwards.

This means that if you are a buyer of any of the future contract on any of these 46 stocks and if you do not sell or square off the contract before the expiry, you would have to buy the underlying shares and pay the full amount of the contract and if you are unable to pay, a margin penalty will be involved. Similarly, if you are a seller of a future contract and you do not buy it back before the expiry, you will have to give actual delivery of shares and if you are unable to give delivery, the shares would be auctioned.

To save your from the above costs, the SAMCO RMS Policy is upgraded to incorporate the below points

  • All outstanding positions in contracts in these stocks at end of business on 25th July, 2018 i.e. Wednesday shall be considered as MIS positions on market opening on 26th July, 2018 and will go into auto-square off mode as on 26th July, 2018 at 3:15 PM.
  • No fresh positions in NRML shall be permitted in these contracts on expiry day for current month contracts. Product types MIS/BO/CO shall continue to be available and shall be squared off at the usual time of 3:15 PM.
  • No position conversion or spread orders shall be allowed in these contracts on expiry day i.e. 26th July, 2018

What can you do if you have a position in these stocks?

  • Option 1 – Rollover using spread contracts or manually on or before end of trading on Wednesday, 25th July, 2018.
  • Option 2 – Manually Square off positions on Thursday, 26th July, 2018 before 3 PM which shall be MIS positions. Clients wanting to carry positions to next month can can exit these MIS Positions for current month and enter new positions in next month contracts in either the MIS/NRML product category as clients may desire.

What happens in case you do not complete either of the 2 options above?

In case both Option 1 or 2 are not completed by the clients, SAMCO RMS shall square off open positions (which shall be outstanding as MIS) at 3:15 PM on Thursday, 26th July 2018.

List of Stocks to be physically settled are as follows:

  1. Adani Power Ltd.
  2. Ajanta Pharma Ltd.
  3. Allahabad Bank
  4. Andhra Bank
  5. Balrampur Chini Mills Ltd.
  6. Beml Ltd.
  7. Berger Paints (I) Ltd,
  8. Can Fin Homes Ltd.
  9. CG power And Industrial Solutions Ltd.
  10. Chennai Petroleum Corporation Ltd.
  11. DCB Bank Ltd.
  12. Godfrey Phillips India Ltd.
  13. Godrej Industries Ltd.
  14. Granules India Ltd.
  15. Gujarat State Fertilizers & Chemicals Ltd.
  16. Hexaware Technologies Ltd.
  17. Hindustan Construction Company Ltd.
  18. IDBI Bank Ltd.
  19. IFCI Ltd.
  20. Jaiprakash Associates Ltd.
  21. Just Dial Ltd.
  22. Kaveri Seed Company Ltd.
  23. Kpit Technologies Ltd.
  24. Mahanagar Gas Ltd.
  25. Mangalore Refinery And Petrochemicals Ltd.
  26. NHPC Ltd.
  27. NIIT Technologies Ltd.
  28. Oil India Ltd.
  29. Oracle Financial Services Software Ltd.
  30. Oriental Bank Of Commerce
  31. PTC India Ltd.
  32. PVR Ltd.
  33. Reliance Communications Ltd.
  34. Reliance Naval And Engineering Ltd.
  35. Reliance Power Ltd.
  36. Repco Home Finance Ltd.
  37. Siemens Ltd.
  38. SREI Infrastructure Finance Ltd.
  39. SRF Ltd.
  40. Syndicate Bank
  41. The Ramco Cements Ltd.
  42. Torrent Power Ltd.
  43. TV18 Broadcast Ltd.
  44. United Breweries Ltd.
  45. V-guard Industries Ltd.
  46. Wockhardt Ltd.

Happy Trading!

19 Comments

    1. Dear Mr. Deepak, thank you for getting in touch with us. This list was set by the Exchange, based on the value-research made by its own internal teams.
      We hope this clarifies things. Thank you for your time. Have a great day!

    1. Dear Amulya, thank you for getting in touch with us. We do have multiple platforms available for trading options in the market. We’ve got the mobile app (StockNote), web terminal (trade.samco.in) and the desktop EXE (Nest Trader). It’s entirely up to you to decide on the platform that’s more convenient for you.
      Thank you for your time. Have a great day! 😀

  1. Anoop Aggarwal

    Very very thanks for intimating clients in advance.

    1. Dear Jayesh, yes, this is applicable to the option positions (In-the-Money) as well. Those positions which are “Out-of-The-Money” are not included in this.
      We hope this answers your question. In case you have any questions or need any help, please do contact us; we’re happy to help you. Thank you for your time. Have a great day!

  2. Tobias M

    Bottom line: Can the traders be saved from physical delivery by SAMCOs RMS intervention – yes or no? Try to speak plain simple English please no technical terms. By RMS whatever intervention, is physical delivery avoidable

    1. Greetings! Thank you for getting in touch with us. Yes, by squaring-off your position in intraday trade, you won’t be receiving the delivery of shares; everything gets settled in cash this way.
      We hope this answers your query. In case you have any questions or need any help, please do contact us; we’re happy to help you. Thank you for your time. Have a great day!

    1. Dear Amit, thank you so much. Do stick around for more Exchange updates, right here in our knowledge center. Happy Trading! 🙂

  3. Tobias M

    Thank you sir for your response. On expiry in-the-money gets ‘exercised’ and the trader is in profit. In your above article to all traders you mention ‘squaring off’, do you mean exercised or something different.? Please clarify with a trade example. Also, this government circular is for all contracts – near month, middle month and far month? Thanks.

  4. ALOK TIWARI

    Sir I have a position in hexaware out the money option
    Wat should I do??
    I don’t want to take delivery
    Till which date I can wait for my position??

    1. In compliance with the new NSE regulations, SAMCO shall consider your carryforward position as an intraday position on the day of the expiry, and square-off your positions at 3.15pm, and thereby save you the hassle of physical settlement. If you wish to maintain any futures positions, you may roll over the said instruments.

      We hope this resolves your queries. In case you have any questions or need any help, please do contact us; we’re happy to help you. Thank you for your time. Have a great day! 🙂

    1. Dear Prakash, to check your profit & loss, kindly open your back-office webpage and scroll down to ‘Reports’ tab and press the ‘Profit &loss Equity’ or ‘Profit& loss Derivatives’ Tab. You can find the consolidated report there, categorized by year-on-year basis.

      If you have any more queries or issues, feel free to contact us; we’re happy to help you. Thank you for your valuable time. Have a great day ahead!

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