Delivery Margin on WebNotes

Physical delivery timing on Zerodha

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

Overview

Physical delivery timing on Zerodha is the schedule on which margins ramp, obligations are computed, and shares and funds move when a stock futures or in-the-money stock option position is carried into expiry under compulsory physical settlement. The delivery margin steps up over the four trading days before expiry, the obligation is fixed after the close of the expiry session, and the actual transfer of shares and cash happens on the second trading day after expiry, Expiry plus 2 (NSE Clearing equity-derivatives settlement framework). Index derivatives are cash settled and carry none of this; only single-stock derivatives are physically settled, a rule in force since the physical settlement of stock F&O regime took effect in October 2019.

Stock-option restrictions near expiry

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

Stock options are restricted near expiry because all single-stock derivatives on the National Stock Exchange are compulsorily physically settled on expiry, and an in-the-money stock option that is held to expiry converts into an obligation to give or take delivery of the underlying shares. To make traders fund that obligation in advance, the exchange applies a physical-delivery margin ramp on in-the-money stock options starting four days before expiry, and Zerodha layers its own controls on top: it blocks fresh deep-in-the-money and illiquid stock-option positions near expiry and runs square-off-only behaviour where appropriate. This article explains the margin ramp day by day, why the blocks exist, and how to avoid both.

MCX additional margins as a cost of carry

Sat, 20 Jun 2026 00:00:00 +0000

MCX additional margins are the extreme loss margin, additional or ad-hoc margin, tender-period and delivery-period margins, and pre-expiry margin that the Multi Commodity Exchange and its clearing corporation levy on a commodity futures position over and above the SPAN initial margin. They are blocked capital, not a charge: the money is returned when the position is closed or settled. What they cost the trader is the use of that capital for the days it stays locked, a cost of carry rather than a fee on the contract note.

Delivery margin field on Kite

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

The delivery margin field on the Kite funds page shows the additional margin held against open stock F&O positions in their last few days before physical settlement . This is on top of the regular SPAN + Exposure margin.

What physical settlement is

Since SEBI mandated physical settlement for stock F&O (April 2018, fully effective by 2019):

Stock futures and options contracts settle by delivery, not cash.
The seller delivers the underlying shares; the buyer pays the strike value (for options) or settlement price (for futures).
For an ITM option, the delivery obligation is the lot size of underlying shares.

The settlement happens on the expiry date (last Thursday of the contract month for most NSE stock F&O).