Can only a portion of the options contract be exercised?
No, options contracts listed on Indian exchanges are standardized, and partial exercise is not allowed. If you're holding an options contract that goes in-the-money, the entire contract is exercised—not just a part of it.
Why Can’t Options Be Partially Exercised?
Each options contract represents a fixed lot size (e.g., 50 or 100 shares depending on the underlying). This standardization ensures consistency in settlement, clearing, and risk management.
Example:
If you hold 1 lot of a NIFTY call option that represents 50 shares, and it expires in-the-money:
- The exchange will automatically exercise all 50 shares worth of the option.
- You cannot choose to exercise just 25 shares or any other fraction.
What if...
| Scenario | Outcome |
|---|
| You try to exercise only part of the contract | Not possible; entire lot will be exercised |
| You don't have sufficient funds or margin | Exercise may fail or lead to penalties on settlement |
| You close your position before expiry | No exercise takes place since you're no longer holding the contract |
Important: Always manage your margin and exposure accordingly, as entire lots are subject to automatic exercise at expiry if in-the-money.
Last updated: 27 Jun 2025
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