Part 3 Learn Institutional Trading

Expiry & Settlement Terms
a) Index Options (Nifty, Bank Nifty)

They are settled in cash, not in shares.

b) Stock Options

They are settled through physical delivery of shares if the contract expires in-the-money.

c) European Style Options (India)

Indian markets allow exercise only on expiry day, unlike American options (any time).

d) Premium Settlement

Premium is paid upfront while taking the position.

e) Final Settlement Price (FSP)

Exchanges calculate it based on the closing price of the underlying asset on expiry.