Auto square off clarification


Suppose I held an option short position today and tomorrow my position is in negative and my margin shows negative by some amount say -3k …then will my short position be automatically square off at 3.30 the day when margin showing -ve or the next day at the opening of market hour…
@nithin @Bhuvanesh
Pls throw some light and clarify…
I tried to call customer service but they told that the system may square off but I need clear reply will the system automatically square off or if it does when before 3.30 or the next day morning or what -ve margin percentage promt the system to automatically square off the position…
If it does automatically square off a position then what is the logic behind interest on margin shortfall…


Since you have an option short position, there won’t be a daily marked to market loss(MtoM), however, as your position turns into a loss, the margin required for the option contract will go up. Exchange releases SPAN margins 4 times during the day and due to the increase, your free cash will become negative and your position will be squared-off after providing a margin call to add more funds to your account.


4 times in a day means …please elaborate with exact time of the day.


Missed to include the timings.

The exchange releases the SPAN margin files at around 11:00, 12:30, 14:00 and 15:30 during the day. We update the same within 30 minutes of receiving the files.


How does unrealised profit or loss affect margin in case of short options?


If in the case of margin shortfall, held position is automatically square off…then why margin shortfall penalty is charged when position is automatically squared off … seems funny or I missed something


While our RMS team tries to square-off all positions without adequate margins, adverse movements in the contract during market close could result in the position being left open, in which case, the exchange levies a margin shortfall penalty.