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Asked a question 4 months ago

If an index option seller forgets to exit (buy) an ITM put on the expiry day, what will be the consequences? When will it be auto settled?

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It's auto settled for cash.

No need to worry about Index options. They are cash settled, whether you're a buyer or seller.

But stock options are different. You should square off your ITM position to avoid settlement.

1) Either have the money in your account to buy those shares (CALL buyer or PUT seller)
2) You should already have those shares in your demat account (PUT buyer or CALL seller)

Hey @Kumar31,

Since you have an Index Option position, It will be cash settled by the exchange.

Hope this clarifies!