Comment on Policy on settlement of compulsory delivery derivative contracts — Update Oct 2019
commented on
28 Oct 2019, 05:27 PM
Kans,
As Nitesh explained, this will be a CTM contract.
If you have long options, if you fulfill the margin requirements, it will be physically settled. Otherwise, it will be marked as do-not-exercise(you will lose the premium).
If you’ve written options, depending on the counterparty(the long option buyer), the position will be exercised or not.