How to lower Margin requirements?

As we know, the margin req is higher during last few days of FnO expiry. My Avble margins went negative 2 days before Oct '21 expiry and I had to exit few option positions to get back to positive. I’m wondering if something similar happens in the future, can I lower my margin req by entering into an offsetting trade… for eg: If I am short SBIN CE 550… could buying SBIN CE 600 lower my margin req ?

Pls suggest @ShubhS9

Yes. Hedging will lower margin requirements but does not stop assignment which requires full contract value. Better roll over for next expiry.

The only thing that I am not sure is if the system would let me place a new buy order for hedging when my available margin is negative… sure it will bring down the required margin but what about the initial margin required to place the new order ? @siva

You will need sufficient funds in your account to buy options. If the balance is negative, the order will be rejected.