Margin Requirement for naked Straddle

F&O
1

Hello there, I just want to know that suppose I created a short straddle on BN and it shows a margin requirement of Rs. 105000 /- at the time of executing the trade but later that day the volatility rose a bit and it shot up to Rs. 115000. In this case had I not exited my previous position, am I still liable to put an extra Rs. 10000 /- in my account for the trade to continue for the rest of the day without getting a margin call? Please clarify

Thanks.

2

Hello Tanbir,

To avoid margin calls, it’s advisable to consistently maintain additional funds in your account. In cases where the required margins aren’t met to sustain your position, Zerodha will send both an SMS and an email as notifications, urging clients to deposit the necessary funds. Zerodha may square off the position if the required funds are not added.

3

how much time do I have to add the extra funds before zerodha squares off my position itself?

4

Zerodha sends margin call SMS and email when the margin utilisation exceeds the available balance.

  • If the margin call is received before market hours, please add the funds immediately to the Zerodha account.
  • If the margin call is received after market hours, the funds need to be added before 11:59 PM on the same day.

The position will be squared off at the discretion of the Zerodha team if the funds are not added.

2 Likes
5

Umm, what if it is not a positional trade but an intraday trade that is MIS? Would there still be a Margin Call?

1 Like
6

Yes, margin calls are sent for both positional and MIS trades.