Thanks Mohd Faisal for quick reply. Just few more follow-up questions.
Let’s assume that I am short 1280 CALL on Kotak
1a) Kotak trades at 1275. (Non Covered CALL) Despite Kotak is trading closer to the strike, Zerodha will NOT square-off during the expiry day or earlier as long as sufficient span+exposure margin is maintained. Correct?
1b) Kotak trades above 1280 (say around 1320) but I hold equivalent stocks in my demat. Zerodha will not square-off on expiry day or earlier as I can meet delivery obligations. Correct?
Now let’s assume that I am short 1280 PUT on Kotak
2a) Kotak trades at 1285. (OTM) Despite Kotak trades closer to the Strike, Zerodha will not square-off on expiry day or earlier as long as sufficient span+exposure margin is maintained. Correct?
2b) Kotak trades at 1275 (ITM). Though I don’t have sufficient balance in my demat account to pay for stocks, I have sufficient margin balance to meet span+exposure margin requirements. Will Zerodha square-off ONLY on expiry day (Thurs) or can it even do it earlier during expiry week as soon as the Naked PUT becomes ITM? Pls clarify.
Thanks in Advance