Comment on Policy on settlement of compulsory delivery derivative contracts — Update Oct 2019

Mangala commented on 29 Mar 2020, 03:57 AM


consider the second case that pramod has mentioned. ( the one resulting in delivery of shares )

On tuesday, the week of expiry, suppose HDFCBANK closed at 750. So its clearly in the money.

1. Now on wednesday morning, am i required to have a minimum margin of 840 * 500 = 4.2 lacs ?

2. Say by wednesday/thursday afternoon, what if i have a balance of just 3.5 L in my account ? Will the RMS square it off automatically?

3. If the physical delivery does go through (assuming answer is NO for above question or if RMS failed for some reason), will zerodha pay for the shortfall of 70k and then levy a interest of 0.05 % per day until i add the remaining 70k correct ? Assuming HDFCBANK eventually closed at 750 on expiry.

4. [if i did maintain the balance] You have mentioned that its going to be a random assignment and the delivery of shares to me is not guaranteed. From your experience, could you tell how random is it ? Like 90 % of the time will get a delivery? Say i do not get picked in this instance, should i just consider myself lucky as i got to premium also and did not have to buy the shares at the PE strike price i sold 840 ?

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