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    "result": {"data":{"wpPage":{"uri":"/home/trading-investment/futures-and-options/other-frequently-asked-questions/what-happens-if-the-option-contract-is-not-squared-off-on-the-expiry-date/","title":"What happens if the option contract is not squared off on the expiry date?","content":"\n<p>There are two broad categories of options in the Indian markets and each follows different rules if you haven’t squared off your positions on expiry day. Let&#8217;s see what will happen in both types of options&nbsp;</p>\n\n\n\n<p><strong>Stock Options:</strong></p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>In-the-Money (ITM):</strong> These get physically settled, meaning you actually receive/deliver the underlying asset (shares).&nbsp;</li><li><strong>Out-of-the-Money (OTM):</strong> These expire worthless and you lose the premium paid.</li></ul>\n\n\n\n<p><strong>Index Options: </strong>Index options don&#8217;t involve physical delivery, only cash adjustments based on the contract value.</p>\n\n\n\n<p><strong>For Bought Options:</strong></p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>If they are ITM at expiry:</strong> You pay STT on the &#8220;intrinsic value&#8221; (how much ITM), not the entire contract value (0.125% rate). Brokerage applies on both buying and settlement.</li><li><strong>If they are OTM at expiry:</strong> You lose the premium paid. Brokerage only applies when buying.</li></ul>\n\n\n\n<p><strong>Shorted/Sold Options: </strong>STT charged only when initiating the short position. No STT at expiry.</p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>If options expire ITM: </strong>You buy the underlying asset at a loss (difference between strike price and market price).</li><li><strong>If options expire OTM: </strong>You keep the premium received as profit.</li></ul>\n\n\n<div class=\"feedback-survey\" data-blocktype=\"custom-block\"><div class=\"heading\"><h3>Feedback Survey</h3></div><div class=\"content\">Yes</div></div>","seo":{"title":"What happens if the option contract is not squared off on the expiry date? - PhonePe Invest Support","metaDesc":"","canonical":"/home/trading-investment/futures-and-options/other-frequently-asked-questions/what-happens-if-the-option-contract-is-not-squared-off-on-the-expiry-date/","metaRobotsNoindex":"index","metaRobotsNofollow":"follow","opengraphTitle":"What happens if the option contract is not squared off on the expiry date? - PhonePe Invest Support","opengraphDescription":"There are two broad categories of options in the Indian markets and each follows different rules if you haven’t squared off your positions on expiry day. Let’s see what will happen in both types of options  Stock Options: In-the-Money (ITM): These get physically settled, meaning you actually receive/deliver the underlying asset (shares).  Out-of-the-Money (OTM): These… Continue reading What happens if the option contract is not squared off on the expiry date?","opengraphType":"article","twitterTitle":"","twitterDescription":"","schema":{"raw":"{\"@context\":\"https://schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"/home/trading-investment/futures-and-options/other-frequently-asked-questions/what-happens-if-the-option-contract-is-not-squared-off-on-the-expiry-date/\",\"url\":\"/home/trading-investment/futures-and-options/other-frequently-asked-questions/what-happens-if-the-option-contract-is-not-squared-off-on-the-expiry-date/\",\"name\":\"What happens if the option contract is not squared off on the expiry date? - PhonePe Invest Support\",\"isPartOf\":{\"@id\":\"/#website\"},\"datePublished\":\"2024-01-31T07:10:26+00:00\",\"dateModified\":\"2024-01-31T07:10:32+00:00\",\"breadcrumb\":{\"@id\":\"/home/trading-investment/futures-and-options/other-frequently-asked-questions/what-happens-if-the-option-contract-is-not-squared-off-on-the-expiry-date/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"/home/trading-investment/futures-and-options/other-frequently-asked-questions/what-happens-if-the-option-contract-is-not-squared-off-on-the-expiry-date/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"/home/trading-investment/futures-and-options/other-frequently-asked-questions/what-happens-if-the-option-contract-is-not-squared-off-on-the-expiry-date/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Home\",\"item\":\"/home/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Trading &amp; Investment\",\"item\":\"/home/trading-investment/\"},{\"@type\":\"ListItem\",\"position\":4,\"name\":\"Futures and Options\",\"item\":\"/home/trading-investment/futures-and-options/\"},{\"@type\":\"ListItem\",\"position\":5,\"name\":\"Other Frequently Asked Questions\",\"item\":\"/home/trading-investment/futures-and-options/other-frequently-asked-questions/\"},{\"@type\":\"ListItem\",\"position\":6,\"name\":\"What happens if the option contract is not squared off on the expiry date?\"}]},{\"@type\":\"WebSite\",\"@id\":\"/#website\",\"url\":\"/\",\"name\":\"PhonePe Invest Support\",\"description\":\"Help Center\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"}]}"}},"categoryAndTag":{"categoryAndTag":null},"featuredImage":null,"fields":{"feedbackSurvey":"Yes","relatedQueries":[],"ctaDetails":null,"isContactSupportVisible":false}}},"pageContext":{"id":"cG9zdDoyMDYwMQ=="}},
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