Cash Settlement on WebNotes

Nifty 50 futures contract specifications

Sun, 21 Jun 2026 00:00:00 +0000

Nifty 50 futures are exchange-traded futures contracts on the Nifty 50 index, listed and settled on the National Stock Exchange (NSE) and traded in India through brokers including Zerodha . One contract represents a fixed lot of index units, 65 from the January 2026 cycle, settles in cash against the index value on expiry, and expires on the last Tuesday of its contract month under the schedule SEBI set from September 2025. The underlying Nifty 50 index is maintained by NSE Indices Limited and tracks the 50 largest and most liquid stocks listed on NSE.

Cash-settled short delivery

Wed, 20 May 2026 00:00:00 +0000

In some cases, a short delivery is resolved via cash settlement rather than auction. This typically happens when:

The auction fails to match.
The scrip is in a specific surveillance state.
SEBI-mandated cash settlement for certain conditions.

How cash settlement works

Exchange determines a “close-out price” (typically a percentage above market).
Short-deliverer pays the close-out price minus original sell.
Buyer receives cash equivalent.
No physical delivery; trade settled in INR.

Vs auction

Aspect	Auction-resolved	Cash-settled
Mechanism	Match in auction session	Close-out price applied
Frequency	Most common	Rare
Cost to seller	Auction premium	Close-out premium
Result	Buyer gets shares	Buyer gets cash

External references

References

SEBI, Cash settlement framework, sebi.gov.in.
NSE India, Close-out pricing, nseindia.com.

Short delivery cash settlement on Zerodha

Wed, 20 May 2026 00:00:00 +0000

When a seller fails to deliver shares for a CNC sell (short delivery), the exchange resolves the trade via the auction market or cash settlement. On Zerodha, the seller pays a penalty plus the price differential.

Process

Seller defaults on T+1 delivery.
Exchange auctions the shares to fulfill the buyer’s obligation.
Auction price is typically higher than market (10-20% premium common).
Differential = Auction price - Original sell price.
Seller pays differential + penalty.

Cash settlement framework

For specific cases where auction doesn’t resolve: