What happens if the option contract is not squared off on the expiry date?

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In-The-Money (ITM) Stock Options Contracts:

Settlement Method: Physically settled.

STT (Securities Transaction Tax): Charged on exercised contracts at a rate of 0.125% of the intrinsic value (how much in-the-money the option is), i.e., intrinsic value * quantity.

Brokerage: Charged on both the buy and sell sides.

Out-of-The-Money (OTM) Stock Options Contracts:

Outcome: Expire worthlessly.

Loss: The entire premium paid is lost.

Brokerage: Charged only on the buy side.

Index Options:

Settlement Method: Cash-settled.

If Bought:

ITM Contracts: STT is charged on exercised contracts at 0.125% of intrinsic value, and brokerage is charged on both sides.

OTM Contracts: Expire worthlessly, and brokerage is charged only on the buy side.

If Shorted or Sold:

STT: Charged only on the sell side when initiating the short.

STT Impact on Expiry: None.

Premiums: Received are kept by the trader, depending on the moneyness of the option contract.