Why are margins still high in F&O segment inspite of decrease in Volatility ?
I am rolling over futures in IDFC First, the margin requirement before march was around 20%, then it increased to 50% during the crash. Inspite of the volatility coming down in the stock and market in general, the margin requirement is 47% now.
Can someone clarify
It will take more time for the margins to come down, I mean the changes will be slow as it has long look back period.
Thanks Siva, can you give us a approximate period for the margins to normalize, say 6 month or 1 year
likely 6 months.
dude, once the margins will adjust as per the look back period, sebi’s new margin rules would’ve been kicked in so forget about lower margins! you’ll have to hedge to reduce margin requirement.
They have already kicked in months ago!!!
What are you talking about?
Do you mean to say the margin requirement will never decrease ? @siva @m
What type of hedge should I undertake to reduce my margin requirement
May take more time and seeing the volatility it may not much.
Can buy far OTM options or sell some options to have some hedge but you should do your work.