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Why were my F&O positions squared off?
Your F&O positions might have been squared off for a couple of main reasons:- Not Enough Margin (Funds): When you trade Futures and Options, especially as expiry approaches, the exchange requires a certain amount of funds, known as 'margin', in your account. This is because these contracts can lead to the actual buying or selling of shares. The margin needed increases significantly in the last few days before expiry, going from 10% of the contract value four days before expiry to 100% on expiry day. If your account didn't have enough funds to meet these increasing margin requirements, your positions would have been automatically closed out (squared off) to avoid any issues.
- Expiry Rules for Index Options: For Index Options like Nifty or Bank Nifty, positions are automatically closed on the expiry day. If your option was 'in-the-money' (meaning it had value), it would have been settled based on the exchange's closing price. If your option was 'out-of-the-money' (meaning it had no value), it would have expired worthless, and you would have lost the premium you paid.
We understand this can be a bit complex, and we're here to help if you have more questions about your specific positions.