Suppose I had entered long call option position at the beginning of the expiry for stock options. Till E-4 day, I need not maintain any extra margin for my position. But my margin requirement increases from E-4 days in accordance with the exchange. Suppose I do not maintain the prescribed margin, what are the consequences?
How many trading days of time do I have after the margin turned to negative, for me to add the funds?(if margin requirements turns negative on Friday, will I have time till Monday to add shortfall margin?)
If I do not maintain the margin requirement, will I be charged margin penalty or will my positions be squared off automatically by RMS team?
If I were to be charged with margin penalty, will the margin penalty be charged on market holidays as well?
Hi @Nihal_TN
Any shortfall due to physical delivery margin requirements will amount to a non-upfront margin shortfall and margin penalty will be charged accordingly.
You can check this thread where Nithin has explained the bifurcation between upfront and non-upfront margin shortfalls in detail.
T+1 day (It will be Monday in this case )
T+1 days here means the next working day, holidays and weekends will not count as cut off days.
In this case, you can bring the shortfall by Monday morning to avoid having the position squared off and a penalty levied.
Both scenarios are possible depending on the extent of the shortfall and days left for the contract expiry.
Yes. You can check more on calculation of margin penalty here
I have done some research and drafted the margin requirements and Margin penalties for FNO, for anyone who may find it helpful. And also request to suggest any information or items that had been missed here, which you think might be good to know.
Please access the draft here