Do Zerodha block exposure margin while writing option…
Yes, not just Zerodha but all brokers block margins for writing options.
There are a few brokers who let you write options without collecting the entire exposure margin, but exchange mandates all of us to collect both SPAN +Exposure if any option positions are held overnight. So if someone isn’t, he is not being compliant to rules set out there and taking excessive business risk if volatility shoots up. Check my answer here on why it may not be a good idea to trade with such brokers.