We recommend reading this chapter on Varsity to learn more and understand the concepts in-depth.

There are no key takeaways in this chapter 🙂



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  1. Ramachandran says:

    I purchased x shares 1000 nos.( equivalent of one lot ) for Rs.1000 per share in equity segment.
    I sell call option at strike price 1050 for premium of Rs.80.
    During contract expiry the underlying value becomes Rs.1200.

    Kindly clarify what will be my profit / loss.
    Also clarify whether brokerage charges will be charged for selling as well as for equity delivery.
    Also kindly clarify whether entire margin paid will be re-credited into my trading account or any part only.

  2. Sagar says:

    Hello ,

    By mistake I sold CE (which is illiquid) instead of PE of stock but to hedge I bought future of stock same expiry .

    Real Life example 🙂 :
    Aarti Ind was at 750 at starting of month , I want to sell it’s Aug PE but by mistake sold it’s Aug CE at 50 [Contact is illiquid only single contact ]
    To hedge I bought Aarti Aug Future at 749.50
    But on the day of expiry Aarti trading at 799

    I do have enough margin available till end but just like to know is what will be extra charges after 0.1% of STT of net delivery values in my case it will be 799 X 850 + 700 * 800 ‘s 0.1% if I am not wrong

  3. Dipak says:

    I had purchased 4 lot for futures for about 4 laks,but i didn’t exist on the last day.what happens in this case.

    • Karthik Rangappa says:

      The futures contract will be settled physically if its a stock future, cash-settled if its index futures.

  4. Amit Kumar Sarkar says:

    Give your views about physical settlement of currency option trading on the expiry day. Is it same as that of index option trading i.e. cash settlement.

  5. Sourav Babar says:

    What exactly is physical settlement?
    Do we need to do anything extra?
    Unable to understand this concept

    • Karthik Rangappa says:

      Sourav, I’ve explained this in the chapter itself. I’d suggest you start with understanding cash settlement and then move to physical settlement.

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