I see there’s a huge difference between the actual margins blocked on my account, and the Final margin indicated in the basket for the set of positions.
I’m talking about 25% higher margins blocked.
Additionally, deep otm buy positions are not providing any margin benefit. Why would that be the case?
I have created a ticket #20260314964119, but I feel like I’d have a better chance of getting answers banging my head against a wall than from the support team.
@nithin @VenuMadhav
The actual margin required by the exchange (SPAN + Exposure) is ₹23,96,485. Since it’s an option sell order, the basket assumes you’ll receive the premium credit immediately (650 Qty × ₹539 = ₹3,50,350). It deducts this expected premium from the required margin to show you a net Final margin of ₹20,46,135.
Coming to your position, since you actually took this trade a while back, you already received that premium credit in your account on the day you originally executed the order.
Because that premium is already sitting in your account, the margin currently blocked on your Funds page just reflects the live SPAN + Exposure required by the exchange to keep the position open. If you look at the Required margin in your basket, you’ll notice it matches exactly what’s blocked on your funds page (SPAN + Exposure), and it also changes based on exchange span requirements.
Since I don’t see any hedged legs here, it’s a straightforward calculation.
Thanks for explaining. And it makes sense. But then what’s the point of having a net margin when what is getting blocked is the actual margin? The reply on my ticket is confusing as it says final margin is the amount (margin) that’ll actually get blocked. Which also made sense to me because I had always assumed the premium collected is mine to invest/take out.
Also there’s a second question in the ticket on why buying hedges not giving me any margin benefit? Are the margin benefit calculations for short term and long term expiries different? (From the tradebook, you can check I bought some deep otm dec puts on last Thursday)
Yeah, you’re partly right, but the final margin requirement is what you actually end up paying. It already takes into account any premium you collected (or paid) plus any hedge benefits you’re getting. and the number you see on your funds page is the final, all-in figure, and premiums would already be factored in.
Regarding your second question about margin benefits, the benefit you receive depends entirely on your overall position and the specific leg you are using to hedge it. It isn’t strictly based on whether the expiry is short-term or long-term. To see the exact margin benefits for specific combinations, you can check them using the basket order feature or on Sensibull.
