Since the time NSE has introduced the following Circular NSE circular dated September 26, 2019 , All F&O Stocks would have to be physically settled.
This means that if you are a buyer of any of the future contract on any F&O 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 you 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 day previous day of Expiry shall be considered as MIS positions on market opening on the Expiry Day and will go into auto-square off mode.
- 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 the expiry day.
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 the day before Expiry Day.
- Option 2 – Manually Square off positions on the Expiry Day 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 the Expiry Day.