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Index F&O is settled in cash; Holding stock till F&O expiry may deny actual delivery, hence stock positions at expiry should be handled carefully…
Published by The Retail Trader · JUL 31, 2026 · Derivatives (F&O)
Cash Settlement vs Physical Settlement — Index F&O is settled in cash; Holding stock till F&O expiry may ban actual delivery, hence stock positions at expiry have to be handled carefully.
This term comes under Derivatives (F&O), in the section "BASE OF DERIVATIVE". First of all that structure is given as complete F&O:
Other terms in this group — understanding them together is more useful:
• Derivative
• Underlying
• Contract
• Lot Size
• Expiry
• Weekly vs Monthly Contract
• Contract Cycle
• Rollover
• Cash Segment vs Derivative Segment
• Open Interest
To read the entire group and all its examples in one place, see the journal "DERIVATIVES: DICTIONARY OF FUTURES & OPTIONS" - this term has been taken from there.
This entry is for educational purposes only and is not a recommendation to buy or sell. Exchanges change charges, margins, lot sizes and expiry rules from time to time, so verify any figures with your broker or exchange.