Index Futures Hedging with Options Margin Requirement


If I take following Position (1 Lot: 50 Quantity).
A. Futures: Long Nifty Oct Fut @ 17975 LTP.
B. Option: Long Nifty 18200 PE @ 341 LTP.

The margin requirements are as under:
A. ₹1,09,389/- for Future Position without Hedge.
B. ₹17,975/- for Future Position with Hedge + ₹17,050/- for Options Premium; Total: ₹35,025/-.

My question is:

If my balance is ₹35,025/-; and at the end of the day future position is in loss of 50 points, the future mtom will be -₹2500/- which to some extent will be off-set by the unrealised gain in Option Hedge.

Will the position still be LIVE or it will be squared off by RMS team due to short funds. Best Regards.

While the loss will be debited from your available balance. The unrealized gains in your options position won’t be added. You need to maintain sufficient margins, else the position can be squared-off by RMS. Also, not maintaining sufficient margins will attract a margin shortfall penalty. Please check out this support article for more details.

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Thank you very much! Got it!!