The positions in the futures contracts for each member is marked-to-market to the daily settlement price of the futures contracts at the end of each trade day. The CMs who have suffered a loss are required to pay the mark-to-market loss amount to NSCCL which is passed on to the members who have made a profit.

This is known as daily mark-to-market settlement. Theoretical daily settlement price for unexpired futures contracts, which are not traded during the last half an hour on a day, is currently the price computed as per the formula detailed below:.

The mark to market losses or profits are directly debited or credited to the CMs clearing bank account. Download file for market settlement.

The final settlement of the futures contracts is similar to the daily settlement process except for the method of computation of final settlement price. These would be construed as non compliance and penalties applicable for fund shortages from time to time would be levied.

A penalty of 0. Settlement of options contracts on index and individual securities.

Premium settlement is cash settled and settlement style is premium style. The premium payable position and premium receivable positions are netted across all option contracts for each CM at the client level to determine the net premium payable or receivable amount, at the end of each day. The CMs who have a premium payable position are required to pay the premium amount to NSCCL which is in turn passed on to the members who have a premium receivable position.

Trading, Clearing & Settlement Process | Derivatives on Stock Market

This is known as daily premium settlement. CMs are responsible to collect and settle for the premium amounts from the TMs and their clients clearing and settling through them.

The premium payable amount and premium receivable amount are directly debited or credited to the CMs clearing bank account. Final Exercise settlement is effected for option positions at in-the-money strike prices existing at the close of trading hours, on the expiration day of an option contract.

Long positions at in-the money strike prices are automatically assigned to short positions in option contracts with the same series, on a random basis.

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For index options contracts and options contracts on individual securities, exercise style is European style. Final Exercise is Automatic on expiry of the option contracts. Option contracts, which have been exercised, shall be assigned and allocated to Clearing Members at the client level.

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The higher the Percent of Deliverable Quantity to Traded Quantity the better - it indicates that most buyers are expecting the price of the share to go up. Theoretical daily settlement price for unexpired futures contracts, which are not traded during the last half an hour on a day, is currently the price computed as per the formula detailed below: After daily settlement, all the open positions are reset to the daily settlement price. Daily Premium Settlement Premium settlement is cash settled and settlement style is premium style.

Open positions, in option contracts, cease to exist after their expiration day. Related Links Watch the market live! Equities Stock Watch Charts Map of the Market Get real-time market analyses! Verifying your trades Registering a complaint Getting NSE certification Did You Know The higher the Percent of Deliverable Quantity to Traded Quantity the better - it indicates that most buyers are expecting the price of the share to go up.