If I have 1 lot o Futures (say of Motherson Sumi)
And I also have sold 1 lot of ITM Motherson Sumi 170 CE (call)
a) What Margin I need to have on expiry day ?
b) What if I let both expire what will happen ? Will the buy and sell neutralise each other and the amount of profit or loss be added or deducted from account ? Or would something else happen ?
On expiry day the margin requirement for Futures and Short Option position position will increase to 40% if the contract value or SPAN + Exposure margin (whichever is higher).
If the Option position expires ITM, your obligations will be netted-off and the amount of profit/loss will be credited to/debited from your account. You can learn more about physical settlement here.
Thank you very much for your clear precise reply