Recently, I applied bear call spread on titan.
Sold 1540 CE
Bought 1560 CE
Suppose I sell 1560 CE 1-2 day before expiry (because I’m sure stock will remain low) will I lose the margin benefit?
Will zerodha demand more margin because I closed hedge position before expiry?
Please answer.
If no hedge then no margin benefit.
Yes, there won’t margin benefit.
Bigger problem here is, in stock options the margins will increase in the last two days to cover for the physical settlement. Please don’t hold it to expiry unless you are okay with physical settlement. In this case, you might have to give delivery of Titan shares if falls below 1540.
Yes, if your position isn’t hedged, there won’t be any margin benefits and you’ll need full SPAN + Exposure margin.
Also, on last two days of expiry, margin requirement will be twice of SPAN + Exposure margins.