Physical delivery risks in stock F&O

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

Overview

Physical delivery risk in stock F&O 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 National Stock Exchange have been physically settled since October 2019; index derivatives are cash settled and carry none of this risk.

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 F&O on WebNotes

Physical delivery risks in stock F&O

Overview

Physical delivery timing on Zerodha

Overview