Can I carry forward Option writing positions taken with Collateral margin

Please assume that I sold 1 lot of BANKNIFTY using collateral margin and I have enough collateral margin required for that trade.

Will I be able to carry forward my position until expiry just with collateral margin? Or am I supposed to have 50% margin as CASH component ?

In case of an Hedge position usually a buy, I believe this requires 50% of the margin should be CASH component. Please correct me if my understanding is wrong.

@nithin @siva


You can carry the position to expiry. However, Zerodha will be funding the 50% cash component and will charge an interest of 0.05% per day. If you bring in the 50% cash margin, no interest is charged.

For the buy leg, you’d need to bring in cash to pay the option premium. Collateral can only be used for margin requirements.

For credit spreads, margin charged is lesser than a naked short call. Can we take credit spread with collaterial? Asking this as it involves an option buy trade of lesser premium.
Or do we need cash for buying premium?

Yes, you can sell the short first, receive premium credit, use this to trade the buy leg and lock in your credit spread.

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