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Delivery margins for Physical Settlement in Equity Derivatives -Effective from September expiry on wards.

Posted on 19-Sep-2018 Comments  0

Dear Customer,

Greetingsfrom Tradeplus!!!

In our constant endeavor to keep you updated of the latest regulatory changes, we hereby notify on the NSE’s circular no 67/2018 (Download Ref no NSCCL/CMPT/38039) dated June 15, 2018 & latest circular 109/2018 dated 4th September 2018,(Click circular) on Physical Settlement in Equity Derivatives. Additional risk management measures are being implemented in respect of derivative contracts which shall be settled through delivery.


In addition to margins applicable for F&O segment,delivery margins shall be levied on potential in-the-money long option positions four (4) trading days prior to expiry of derivative contract which has to be settled through delivery. Example- If expiry of derivative contract is on Thursday, the delivery margins on potential in-the-money long option position shall be applicable from previous Friday EOD. Delivery margins on potential in-the-money long option positions shall be levied at client level and collected from clearing member in a staggered manner as under,


Ø  20% of Delivery margins computed on Expiry - 4 EOD

Ø  40% of Delivery margins computed on Expiry - 3 EOD

Ø  60% of Delivery margins computed on Expiry - 2 EOD

Ø  80% of Delivery margins computed on Expiry - 1 EOD


What was the changemade by Navia on the physical settlement of derivative contracts? (CLICK here for the physical settlement notification)

  • Fresh positions (NRML/MIS/CO) in current month expiry contracts will not be permitted from four (4) trading days prior to the expiry for stocks that are to be physically settled.
  • Navia will start squaring off open positions in these four (4) days prior to expiry.
  • Client can either choose to roll-over ( i.e close current month derivative contracts and take fresh positions for the next month contracts) or square off  the NRML positions in derivative segments and take fresh positions in cash market by maintaining the required margins.
  • Navia shall not allow any scrip to be settled for physical delivery on the expiry day.

What are the current changes as per the new circular on physical settlement derivative option contracts?

In view of the above compulsory margins levied on the physical settlement of long option contracts, Navia shall not allow the physical delivery of these contracts on the expiry day. Hence Navia shall square off all the current month long option positions (Both in the Money & Out of the Money) four (4)trading days prior to the monthly Expiry of the contracts. Eg. if the monthly expiry is on Thursday, long open positions  will be squared off on previous Friday , i.e four ( 4 ) trading days prior to the expiry.

It is also stated that, the above changes shall be applicable for September 2018 expiry contracts and accordingly, the above mentioned margins shall be levied from Friday, 21st September 2018 EOD onwards on all your open positions which could have been built on or before such dates.

You are requested to take note of the above changes and trade or roll over the expiry month options contracts accordingly. Please write to us at or reach us on our customer support desk 044-49427576,044- 28214171 for any clarification.

With Best wishes

Tradeplus Team





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