Bank nifty future contract settlement

If i am long on a bank nifty futures contract, approx margin requirement is around 1.75 lacs… 1.75 lacs divided by 25 (1 lot) = 7000 points… now if bank nifty falls more than 7000 points before the contract expiry, can my loss exceed the initial margin of 1.75 lacs by debiting from my available cash ? Or the max loss can be of 1.75 lacs that is the initial margin ??
bought a bank nifty april future @ 37000
Margin ₹1,75,000
Cash available: ₹5,00,000
Bank nifty april futures falls to 28000
What will be the loss on expiry ??

in futures or short options your loss isn’t limited to margin blocked… it is undefined and can easily become more than margin blocked… if you’ve taken position at 37000 and bank nifty expires at 28000 then your loss will be 9000 points… now multiply that by 25…

1.75 lac is the margin that is required to get into a trade. Exchange collects these margins from both parties i.e buyer and seller to make sure there is no default. This doesn’t mean the margin amount will be your max loss. If banknifty falls by 10k points tomorrow you will potentially lose 10k*25=2.5lac. If it goes up by 10k points you will make 2.5lac and so on.

If losses exceed the margin amount then the same will be collected from your free cash. If you don’t have free cash then the broker can square off your positions at a certain level to make good for the loss.

Also, you need to maintain this daily margin requirement of 1.75 lac in your account on a daily basis irrespective of you being at loss or not. Failing to maintain this margin may lead to an exchange margin penalty.

Keep track of daily margin statements which will help you understand the margins that are to be maintained on daily basis.