Suppose someone sells an ITM call option 1 day before expiry by paying the required upfront margin and carries the position to the next day. Also, he carries just enough money in the account to sell the ITM option.
On expiry day, margin requirements increase. And as he has no extra money in his account, his margin requirement will show negative.
Now my question is, in the above case, will the person incur a margin penalty?
Another question: Will the penalty be given if the margin prices increase because of an increase in volatility, in case of no extra money in the account?