Announcements

As per a recent Exchange circular, the expiry days for F&O index contracts have been revised. Starting January 2025:
- NSE index F&O contracts will expire on the last Thursday of each month.
- BSE index F&O contracts will expire on the last Tuesday of each month.

Here’s a detailed table for your reference:

Keep in mind
- There is no change in expiry day for NIFTY monthly, weekly, quarterly & half yearly F&O contracts. They will continue to expire on Thursdays.
- There will be no change in the existing SENSEX weekly F&O contracts expiring on 3 January 2025.
- New F&O BSE Index contracts placed after 1 January 2025, will have an expiry day of Tuesday

To learn more, you can refer to the: NSE circular | BSE circular

Please note, the following securities will be removed from SEBI’s list of approved securities for Margin Pledge.

As a result, you will not receive margins for F&O trading against these scrips starting Tuesday, 31 December 2024 : Click here for scrip details

NOTE: If you have pledged any of the above, starting 31 December 2024, you will not receive margins pledge benefit and you will be required to fulfil the full margin requirement. If you’re unable to pay, we will have to automatically square off your positions to recover the amount by 1 January 2025.
We have attached a list of these stocks for your reference.

Please review your portfolio and make necessary adjustments to avoid any inconvenience. Thank you for your understanding and cooperation.

On account of Christmas, there will be a trading holiday on Wednesday, 25 December 2024.

Keep in mind:

🔸Equity, Derivative and Commodity markets will be closed on 25 December. Trading will resume on 26 December.
🔸Standard Fund Withdrawal requests placed after 8 AM on 24 December will be processed on 26 December
🔸Instant Fund Withdrawal facility will not be available on 25 December

As per our previous communication, we would like to remind you about the lot size revisions and subsequent actions for BANKNIFTY, NIFTY, and SENSEX quarterly and half-yearly contracts. The revised lot sizes are detailed in the following table:

Which contracts are impacted by this?
The quarterly/half-yearly contracts expiring from March 2025 onwards are getting impacted.

What action is required from you?
If your existing quarterly/half-yearly positions are not in multiples of the revised lot size, you would be required to square off the existing position or purchase more lots.

Example: If you hold an existing position with 1 lot of NIFTY (March 2025 expiry and later) and the current lot size is 25, you have two options to align with the revised lot size of 75:
1. Add 2 more lots 
2. Square off your existing 1-lot

Why is this recommended?
Post revision, if your existing positions aren’t in multiples of the new lot size, you won’t be able to close/square off the position or book profit / losses.

IMPORTANT: Such a position may be worthless on the day of expiry

What actions shall be taken by Upstox?

1. If you don’t have existing Futures positions with quarterly/half-yearly expiry, you won’t be able to place fresh orders in such contracts. Fresh orders shall be permitted only after the expiry of the existing December 2024 contract.

2. If you have a long (Option Buy) position with quarterly/half-yearly expiry of March 2025 and later, no action shall be taken by Upstox. You can either exit the position or purchase further lots to match it to the new lot size. Otherwise, such positions may become worthless.

3. If you have a short (Option Sell) position with quarterly/half-yearly expiry of March 2025
and later, you shall be permitted to trade in such contracts until restricted by Upstox.

4. If your existing short positions are not in multiples of the revised lot size by the below deadline, margin and MTM requirements will apply. As we won’t be able to square off such positions in case there is a margin shortfall post revision of lot size, we will fully or partially square off the existing short position in December itself.

The permitted timeline for matching short positions in the revised multiples is as follows:

Please take cognisance of all your positions and plan your trade accordingly.

As per a SEBI mandate, physical settlement is compulsory if a trader holds a position in any Stock F&O contracts on the 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:

Futures

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 lakh.

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 quantities of Reliance and Rs. 1 lakh margin money till the expiry date.

Options

Long - 1 lot of Reliance, 250 quantity for a 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 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 provide the Stocks (shares) equal to the lot quantity positioned to be available in the 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 need 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 December 2024 expiry visit the ‘Profile’ section on your Upstox account on our App / Web and give your consent from here before EOD on Monday, 23 December 2024.

- Based on your consent, Upstox will evaluate whether your position qualifies for physical settlements and if there is sufficient ledger balances / holdings (whichever applicable) are available.

- Kindly, plan your trades keeping in mind that you will not be able to trade in fresh positions in the current November 2024 expiry F&O contracts from Tuesday, 24 December 2024 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 on expiry day at 12:00 PM 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 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 the Beginning of the Day (BOD) instead of the 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 Monday, 23 December 2024.

In the case of spread contracts, you are advised to provide margins for both legs since the risk of one leg being squared off by you at any time would result in the 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 physically 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!