How to identify scrips subject to physical settlement?
Understanding whether a scrip is under physical settlement is crucial when trading in F&O (Futures & Options), especially during expiry. Since regulatory reforms by SEBI, all stock derivatives are now mandatorily physically settled, meaning traders must deliver or accept shares instead of just settling in cash at expiry.
Key Points About Physical Settlement
- Applies to All F&O Stocks:
As per current SEBI norms, 100% of stock F&O contracts are settled physically. There’s no separate list needed. - Index Derivatives Not Included:
Physical settlement applies only to stock futures and options, not index contracts like NIFTY or BANKNIFTY. - Settlement Impact:
If you hold open positions in stock F&O contracts till expiry (not squared off), you’ll need to deliver or take delivery of shares.
Where to Stay Updated
- FYERS Notice Board:
Check for platform alerts, margin policy changes, or special handling instructions near expiry. - Exchange Circulars (NSE/BSE):
SEBI/Exchange periodically release updates on settlement procedures. - Support Portal:
Browse the Derivatives section in the FYERS Support Portal for expiry and delivery-related FAQs.
What If...
| Scenario | What You Can Do |
|---|
| You forgot to square off your stock F&O position | Be prepared for delivery obligation—ensure you have sufficient funds or holdings. |
| You’re unsure if your contract will be physically settled | If it’s a stock F&O, yes—it will be. |
| You usually trade only index options | No action needed—index contracts are cash settled. |
Tip: Always check your margin and holdings status ahead of expiry week if you’re trading stock futures or options.
Last updated: 17 Jun 2025
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