Comment on Policy on settlement of compulsory delivery derivative contracts — Update Oct 2019
commented on
10 Oct 2020, 12:38 PM
Dear Nithin,
I need urgent guidance from you for the following scenarios :
Scenario 1)
Lets suppose that today is monthly expiry of September. I have a short call position in Wipro for example which is deep ITM and it is not liquid and I cannot square it off. I am not holding any stocks of Wipro with me. To avoid assignment risk, what are my different options ? Do i take a counter position so that there is no assignment ? Can i open a fresh long futures position in Wipro in September contract for just the last day and let both positions expire on their own ? What can be other alternatives so that I avoid getting assigned ?
Scenario 2)
Lets suppose that today is monthly expiry of September. I have a short put position in Wipro for example which is deep ITM and it is not liquid and i cannot square it off. I do not have enough cash to take delivery of stock. To avoid assignment risk, what are my different options ? Do i take a counter position so that there is no assignment ? Can i open a fresh short futures position in Wipro in September contract for just the last day and let both positions expire on their own? What can be other alternatives so that I avoid getting assigned ?
Your guidance is urgently required. Pls help.