Confusion about margin requirement on covered call

F&O
1

In the last 2 days of expiry week Zerodha need 100% or 50% contract value?

Also, lets say I sold recltd otm call i.e. 175 Rs. call so contract value will be 1050000 Rs. and in the last 2 days of the expiry week - margin requirement will be increased to 50% of the contract value so it requirement will be 525000 ?

If so what about Monday and Tuesday of the expiry week? And I believe there will not be any major change in margin requirement before the last week of expiry i.e. until Friday of week previous than expiry week correct?

And if I have full 6000 shares of Rec (lot size) in my demat can Zerodha block them for delivery instead asking for 50% of the contract value as margin? @ShubhS9 @Vij

2

For futures and option short positions there will be no additional margin till Wednesday of the expiry week. On Thursday, you will be charged 40% of the contract value or span + exposure whichever is higher.

Even if you have held the equivalent number of shares to give the delivery the additional margin will be blocked and the shares will be debited and delivered to exchange after the expiry. Currently, there is no covered call benefit hence the additional margin is required
To know more about the physical delivery process, Kindly visit the link (Zerodha’s policy on the physical settlement)

3 Likes