# Benefiting from the new margin framework- an example
**URL:** https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658
**Category:** Announcements
**Created:** [June 11, 2020, 8:08am UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658 "2020-06-11T08:08:32Z")
**Posts on this page:** 20
**Page:** 2
### Author:  [@Prateek\_Mittal1](https://tradingqna.com/u/Prateek_Mittal1)
#### Post date: [June 19, 2020, 10:01am UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/24 "2020-06-19T10:01:34Z")
I have a doubt regarding the physical settlement in case of Bear put or Bull call spread. If I take a long 10300 PE position and short 10100 PE position in NIFTY, so do I have to take physical settlement in this combined position irrespective of the spot price on expiry.
---
### Author:  [@ShubhS9](https://tradingqna.com/u/ShubhS9)
#### Post date: [June 19, 2020, 10:12am UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/25 "2020-06-19T10:12:06Z")
Nifty and Bank Nifty Options are cash settled, no physical delivery.
---
### Author:  [@Prateek\_Mittal1](https://tradingqna.com/u/Prateek_Mittal1)
#### Post date: [June 19, 2020, 11:18am UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/26 "2020-06-19T11:18:53Z")
and what about the above same scenario but replace index with any equity derivative?
---
### Author:  [@ShubhS9](https://tradingqna.com/u/ShubhS9)
#### Post date: [June 19, 2020, 11:29am UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/27 "2020-06-19T11:29:17Z")
> [@What Happens To Compulsory Delivery In Case Of Hedged Positions?](https://tradingqna.com/t/what-happens-to-compulsory-delivery-in-case-of-hedged-positions/80812/2):
>
> This is the list of scenarios in which net-off happens [TH4JQCYS\_Screenshot\_208] The margin requirement for all Stock F&O contracts will be increased 2 days prior to expiry (Wednesday and Thursday of the expiry week) to twice of the exchange mandated SPAN + Exposure margin required. You can read more about Zerodh’s policy reg. physical settlement [here](https://support.zerodha.com/category/trading-and-markets/margin-leverage-and-product-and-order-types/articles/policy-on-physical-settlement). In case you trade spreads and scenario arises where one of your position is ITM on expiry, I’ve explained here what happens in that case [Ph…](https://tradingqna.com/t/physical-delivery-otm/70606/12)
Read this.
---
### Author:  [@skv81](https://tradingqna.com/u/skv81)
#### Post date: [June 20, 2020, 9:01am UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/28 "2020-06-20T09:01:28Z")
Thank you. This helps !
---
### Author:  [@KrishnanPS](https://tradingqna.com/u/KrishnanPS)
#### Post date: [June 24, 2020, 2:37am UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/29 "2020-06-24T02:37:32Z")
I want to Sell 1 Lot of Nifty August Futures and Buy 1 Lot of Nifty July Futures. As per Zerodha’s margin calculator the total margin required is Rs 19413. Assuming my account has Rs 50000 funds and the margin for an single leg is Rs 145000. I have the following queries
1. How should I execute this order, should I place both the Buy & Sell order at the same time to get the margin benefit, During market hours it is not possible as it will show up as insufficient margin or
2. Should I keep sufficient actual margin of Rs 290000 covering both legs and when both contracts gets executed the actual margin used of Rs 19413 will be used up and Rs 270500 margin will be freed up? or should I keep 1-side full margin of Rs 145000 and either buy / sell first followed by sell / buy
3. What happens to the margin if i close one leg and carry the other leg
4. To get margin benefit which contract should i execute first - The sell contract or the buy contract
Please see attached screenshot of the potential trade
---
### Author:  [@ShubhS9](https://tradingqna.com/u/ShubhS9)
#### Post date: [June 24, 2020, 3:15am UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/30 "2020-06-24T03:15:30Z")
Doesn’t matter which leg you execute first, you will require full margin to execute that leg, On this strategy you will get margin benefit only after orders for both legs are executed.
---
### Author:  [@AlgoEye](https://tradingqna.com/u/AlgoEye)
#### Post date: [June 24, 2020, 5:47pm UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/31 "2020-06-24T17:47:13Z")
Hello,
Will this be applied to MIS orders as well? If yes will there be extra leverage? If no then why and any chance to get this implemented soon?
---
### Author:  [@ShubhS9](https://tradingqna.com/u/ShubhS9)
#### Post date: [June 24, 2020, 6:00pm UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/32 "2020-06-24T18:00:17Z")
You will get margin benefit for MIS orders as well. Margin requirement for MIS orders is only 40% of NRML margin.
---
### Author:  [@AlgoEye](https://tradingqna.com/u/AlgoEye)
#### Post date: [June 25, 2020, 5:14am UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/33 "2020-06-25T05:14:33Z")
looks like the new margin benefit is only for Normal not MIS. idid today MIS using buy and sell options MIS didn’t gave any leverage
---
### Author:  [@ShubhS9](https://tradingqna.com/u/ShubhS9)
#### Post date: [June 25, 2020, 5:28am UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/34 "2020-06-25T05:28:42Z")
There is no leverage for Buying options, as for Short positions, If NRML margin requirement is 100k, MIS requirement is only 40k.
For hedged positions, Assuming you Bought 10400 Call and Shorted 10500 Call; NRML margin for this trade will be 15,486. At 40%, MIS margin requirement will be 6195 + cost of buying Call (50 Premium \* 75 Lot Size) = 3750.
---
### Author:  [@AlgoEye](https://tradingqna.com/u/AlgoEye)
#### Post date: [June 25, 2020, 6:06am UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/35 "2020-06-25T06:06:12Z")
Thanks,
I did the trade yesterday , i didn’t get the the leverage as specified by you …Ticket #20200624864988… can you see if there is some issue i have specified trade logs as well…
---
### Author:  [@siva-reddy](https://tradingqna.com/u/siva-reddy)
#### Post date: [June 25, 2020, 6:34am UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/38 "2020-06-25T06:34:34Z")
In MIS, benefit will come only on span, not on exposure. 35% of span but 100% of exposure.
---
### Author:  [@AlokBansal](https://tradingqna.com/u/AlokBansal)
#### Post date: [July 17, 2020, 12:57pm UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/39 "2020-07-17T12:57:30Z")
@nithin This is great in theory. Practically speaking a lot of times I am not able to take this margin benefit because of Zerodha’s restrictions on buying OTM options.
This is really a big problem and Orbis account can’t be a solution to this as you are asking user to move from one problem to another where they can’t buy MFs or equity and put them up for collateral.
This issue has been pending for a long time now and has become a real buzz-killer post these new margin rules. Request you to please prioritise a solution which solves this problem without asking user to compromise on things like investing and collateral.
---
### Author:  [@VIJAY\_SURYAVANSHI](https://tradingqna.com/u/VIJAY_SURYAVANSHI)
#### Post date: [October 29, 2020, 6:13am UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/40 "2020-10-29T06:13:16Z")
Margine calculator for below hedging was showing just 23000 margine requirements but when Tried to execute it’s was showing more than 1 Lakh. Why its having so much difference.
BAJFINANCE NOV Fut - Long
BAJFINANCE Nov 3300 PE - Long.
---
### Author:  [@ShubhS9](https://tradingqna.com/u/ShubhS9)
#### Post date: [October 29, 2020, 6:18am UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/41 "2020-10-29T06:18:30Z")
> [@VIJAY\_SURYAVANSHI](#):
>
> Margine calculator for below hedging was showing just 23000 margine requirements but when Tried to execute it’s was showing more than 1 Lakh. Why its having so much difference.
Calculator is working fine, you must have entered wrong values, below is the margin requirment for your trade, this doesn’t include premium you have to pay for taking Long position in PE, you will have to add that amount to this margin.
---
### Author:  [@VIJAY\_SURYAVANSHI](https://tradingqna.com/u/VIJAY_SURYAVANSHI)
#### Post date: [October 29, 2020, 6:29am UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/42 "2020-10-29T06:29:30Z")
So to execute above hedge trade how much Total margine required?
---
### Author:  [@ShubhS9](https://tradingqna.com/u/ShubhS9)
#### Post date: [October 29, 2020, 6:41am UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/43 "2020-10-29T06:41:54Z")
> [@VIJAY\_SURYAVANSHI](#):
>
> So to execute above hedge trade how much Total margine required?
The Total Margin shown above of 71911 plus amount of cash needed to take long position in 3300 PE (Premium \* Lot Size).
You can also add these scrips to Basket Order on Kite Web, which will show you total margin requirement (displayed below in green). If you add Long Option position first, you will also get margin benefit beforehand.
---
### Author:  [@RN2617](https://tradingqna.com/u/RN2617)
#### Post date: [April 15, 2021, 5:33am UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/45 "2021-04-15T05:33:44Z")
Can Zerodha keep an option like checkbox or something like that enabling which it’ll show “Total Required Amount (margin + premium of long option)”. Lots of clients are getting misled by watching “Final margin” amount in Basket Order calculation window.
---
### Author:  [@SachinSingh](https://tradingqna.com/u/SachinSingh)
#### Post date: [April 15, 2021, 6:07am UTC](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658/46 "2021-04-15T06:07:19Z")
@siva-reddy, the margin required feature hasn’t been working properly today, the margin changes from something like 11k to sometimes 30L in an instant…can’t get an accurate picture…
[Previous page](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658.md?page=1)
[Next page](https://tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658.md?page=3)