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Market Intelligence › Basic Terminologies
Broker cutoff, exchange settlement, and the stretch in between when control is not yours
Published by The Retail Trader · JUL 24, 2026 · Derivatives (F&O)
On expiry day the position ends by itself — but who closes it, when it is closed and at what price are three separate questions, and each has a different answer.
Intraday positions are squared off every day at the broker's cutoff. This is the broker's rule, not the exchange's, and each broker's time can be slightly different.
At expiry the exchange settles whatever positions are left. Index options settle in cash at the settlement price; stock derivatives go to delivery.
This is the detail that matters in the last hour:
• Settlement is not at the last traded price, but at the weighted average of the last half hour.
• So a spike or crash at 3:29 does not change the whole settlement.
• Very far strikes are left almost without a bid at the end of expiry.
• Asking for an exit and asking for a price in the last minute do not come together.
The exit plan for expiry day should be ready beforehand, whether you are in profit or in loss. In the last fifteen minutes liquidity is thinnest and the spread widest — that is the worst time to take a decision.
This article is for educational purposes only — it is not a buy or sell recommendation, it makes no claim of guaranteed returns, and it is not advisory. Rules, rates and mechanics are changed from time to time by the exchanges, SEBI and RBI, so verify every number yourself with your broker or an official source.