Sometime I try to buy option of stock on ATM , margin is showing in lack or 10 times from actual premium, WHY?
I know exchanges are required to collect margin on 4 days from expiry, But my question is that when do Zerodha start to collect the high margin for option buying( from expiry day),
I bought some option of stock 8th days before from expiry , shown actual premium and order is also executed, see if I don’t have required fund then order won’t be executed, isn’t it? But my order was on order book as limit order then just order executed and I got margin call sms from Zerodha to add fund immediately, I have more than fund needed for actual premium required , then I square off my trade, Brokerage chages deducted at rs. 40 rs not @ 20rs.
After sometime on same day
price of atm option shown actual value and I got my order executed without margin call @ 20rs. Brokerage rate , I did it 2 times , it’s happened without any intrption,
Zerodha must be follow 4 days rule of exchange
They are trying to stop the trader or try to put penalty on trader and get benifit from this loop hole
Bro, I trade stock options near expiry and this is common stuff. When your option goes ITM, they blocks physical delivery margin, that’s why you saw the big margin and got a call. The moment you square it off or it slips back OTM, margin goes back to just premium. That’s why sometimes you pay extra brokerage if they forces the exit, otherwise it’s normal ₹20. Nothing shady, just their rules to cover delivery risk.
Bro Thanks,
I have one doubt , let’s say I bought OTM stock 2 days expiry and hold it then next day it is showing in ITM then , Will Zerodha send for margin call and if yes, I won’t add the fund that day , will he square off my trade? may be I wanna hold it on expiry day and close by myself.
Bro, once a stock option goes ITM near expiry, it becomes physically settled. That means you need full margin for delivery, not just the premium. Broker won’t risk their own money to cover you, so if you don’t have funds, they’ll square it off on expiry day. This isn’t a brokers rule, it’s an exchange rule. Safer move is to close it yourself before expiry.