https://v2.webnotes.in/tags/delivery-risk/Recent content in Delivery Risk on WebNotesHugoen-INSun, 21 Jun 2026 00:00:00 +0000https://v2.webnotes.in/physical-delivery-risks-fno/Sun, 21 Jun 2026 00:00:00 +0000https://v2.webnotes.in/physical-delivery-risks-fno/<h2 id="overview">Overview</h2> <p><strong>Physical delivery risk in stock F&amp;O</strong> is the exposure a trader carries when a single-stock futures or in-the-money stock option position is held into expiry and converts into an obligation to take or give delivery of the underlying shares at full contract value. The hazard is the gap between the small premium that prices an option and the large contract value behind it: a long in-the-money call bought for a few thousand rupees can become an obligation to pay several lakh rupees and receive the entire lot (NSE Clearing physical-settlement framework). Stock derivatives on the <a href="https://v2.webnotes.in/national-stock-exchange/">National Stock Exchange</a> have been physically settled since October 2019; index derivatives are cash settled and carry none of this risk.</p>