In case of stock options, if the option becomes In-the-money ( ITM) option at expiry, then the buyer or seller has to go for physical delivery of the stocks. If the option becomes Out-of-the-Money ( OTM) then the options become worthless at the expiry.
In case of index options, at expiry the options are cash settled whether they are ITM or OTM if they are not squaredoff before.
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