# Margin requirements for hedged trades up by 80%!
**URL:** https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129
**Category:** F&O
**Created:** [November 21, 2024, 5:39am UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129 "2024-11-21T05:39:53Z")
**Posts on this page:** 18
**Page:** 1
### Author:  [@Arseon](https://tradingqna.com/u/Arseon)
#### Post date: [November 21, 2024, 5:39am UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129/1 "2024-11-21T05:39:53Z")
Had an iron condor position which required margin of around 35L. Today, post SEBI changes, it has gone up to 62L! 80% increase in margin. And this is a hedged position where my max loss in any scenario will only be 5-6L!!
What is the point of such changes if it’s going to cut returns of hedged option sellers in half? I thought the idea was to avoid speculation on naked trades and option buying. Does govt treat hedged strategies also as gambling?
Positions held were
23000 PE Sell
22800 PE Buy
24000 CE Sell
24200 CE Buy
21-Nov expiry
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### Author:  [@psmp](https://tradingqna.com/u/psmp)
#### Post date: [November 21, 2024, 5:54am UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129/2 "2024-11-21T05:54:44Z")
I just created a post on this a while ago, seems like a zerodha issue than a SEBI issue, although yet to be confirmed by the zerodha folks.
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### Author:  [@Arseon](https://tradingqna.com/u/Arseon)
#### Post date: [November 21, 2024, 6:27am UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129/3 "2024-11-21T06:27:54Z")
My position was with 5paisa where 60L margin was asked. Checked on Zerodha margin calculator, it is also showing same values. It is not specific to Zerodha.
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### Author:  [@VenuMadhav](https://tradingqna.com/u/VenuMadhav)
#### Post date: [November 21, 2024, 6:28am UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129/4 "2024-11-21T06:28:55Z")
> [@psmp](#):
>
> seems like a zerodha issue than a SEBI issue
This isn’t an issue specific to Zerodha. An additional 2% margin is being blocked for all short positions irrespective of whether the position is hedged or otherwise. This is as per the recent SEBI circular:
The increase in ELM by 2% is on the entire contract value. So for every lot of nifty option being written (assuming nifty is at 23000, lot size 25), margin will go up by ~12-13k.
Also, from February 01, the margins will rise further since the calendar spread benefit will go away for contracts expiring on a given day. You can read more here - [SEBI's new rules for index derivatives: Here's what's changing – Z-Connect by Zerodha](https://zerodha.com/z-connect/business-updates/sebis-new-rules-for-index-derivatives-heres-whats-changing)
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### Author:  [@pavinjoseph](https://tradingqna.com/u/pavinjoseph)
#### Post date: [November 21, 2024, 4:44pm UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129/5 "2024-11-21T16:44:00Z")
> [@VenuMadhav](#):
>
> An additional 2% margin is being blocked for all short positions irrespective of whether the position is hedged or otherwise.
How does that make sense for hedged positions? 🤔
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### Author:  [@emrys11](https://tradingqna.com/u/emrys11)
#### Post date: [November 21, 2024, 7:02pm UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129/6 "2024-11-21T19:02:30Z")
“On the day of option contracts expiry, given the heightened speculative activity around option positions and the attendant risks…”
This is not well thought out. It should not be implemented on those who are already holding those positions since a day or more, especially when so closely hedged. Why? Becasue SEBIs intention was to target extreme speculative activity on expiry day. But they ended up targeting those who may be holding iron condors from last Friday or even the beginning of the month. Their condors may have lost most of the value and their selling price and/or strike may be so high/far apart that the last day(expiry) is like a small non event day. Just look at the OP of this post. He had 23000 pe sell with 22800 pe buy. Even though nifty fell from 23500 to 23300 it was still quite far from his strike, he was still tightly hedged and he was not doing any intra day speculative fast buy sell. Yet his margins went up 80-100%.
SEBI should have first seen how much of a disparity there already exists in the spread margin charged in other markets vs India. It was already quite big. Now they have effectively doubled it, making it infinitely worse.
Just please if you can get this feedback out there to the SEBI officials.
1. Point out the huge disparity that already existed when considering hedged positions.
2. Point out how much worse it has got from the 2% rule. Did they intend it to be this bad. Did they consider these scenarios?
3. Can they exempt the quantities carried from the previous day or earlier days?(short term solution, can be done quickly)
4. Better yet, can they improve the hedged positions margins to be similar to other counties. This would require consideration of spreads as a unit and disallowing clients from breaking hedges. (harder and less probability of ever happening)
@nithin @VenuMadhav
Please do consider these points yourselves and about bringing them to SEBIs notice.
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### Author:  [@pavinjoseph](https://tradingqna.com/u/pavinjoseph)
#### Post date: [November 22, 2024, 4:54am UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129/7 "2024-11-22T04:54:45Z")
> [@emrys11](#):
>
> Please do consider these points yourselves and about bringing them to SEBIs notice.
I would be surprised if they didn’t bring it up when these proposed changes were in draft stage, unless they didn’t bring it up because it’s in their interest to get that extra brokerage when clients square off the position at E-1.
From SEBI’s viewpoint, they might want to discourage sellers from holding until expiry, thereby reducing liquidity on 0 DTEs and make it even less attractive.
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### Author:  [@dcd](https://tradingqna.com/u/dcd)
#### Post date: [November 22, 2024, 5:32am UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129/8 "2024-11-22T05:32:34Z")
A question for Zerodha:
Suppose I’m holding short options for Midcap nifty of Monday 25th November. Will the extra ELM margin need to be brought in by Monday morning, or by Friday evening itself, so as not to get into negative margins?
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### Author:  [@siva](https://tradingqna.com/u/siva)
#### Post date: [November 22, 2024, 6:10am UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129/9 "2024-11-22T06:10:43Z")
> [@dcd](#):
>
> Suppose I’m holding short options for Midcap nifty of Monday 25th November. Will the extra ELM margin need to be brought in by Monday morning, or by Friday evening itself, so as not to get into negative margins?
Monday morning before 9 am should be enough.
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### Author:  [@Joe\_Maxpayne](https://tradingqna.com/u/Joe_Maxpayne)
#### Post date: [November 22, 2024, 10:22am UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129/10 "2024-11-22T10:22:38Z")
is there a grace time given by zerodha to let traders exit their position on monday morning or system exits them right after market opens?
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### Author:  [@Dorkstar1](https://tradingqna.com/u/Dorkstar1)
#### Post date: [November 22, 2024, 11:26am UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129/12 "2024-11-22T11:26:06Z")
> [@thisisbanerjee](#):
>
> They just sit at a tablet with a Himalayan water bottle by their sides
It’s usually Bisleri bro. I’ve seen it on YouTube
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### Author:  [@siva](https://tradingqna.com/u/siva)
#### Post date: [November 22, 2024, 11:27am UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129/13 "2024-11-22T11:27:20Z")
> [@Joe\_Maxpayne](#):
>
> is there a grace time given by zerodha to let traders exit their position on monday morning or system exits them right after market opens?
Ideally no time will be given, broker can square off at any time.
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### Author:  [@sanjeev\_rai](https://tradingqna.com/u/sanjeev_rai)
#### Post date: [November 22, 2024, 5:20pm UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129/15 "2024-11-22T17:20:51Z")
Can we get a feature in sensibull, to see required margin for overnight position 1 day before expiry.
Or any alert from zerodha, regarding what additional margin is needed.
It will help in reducing position size based on available margin.
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### Author:  [@Sriharan](https://tradingqna.com/u/Sriharan)
#### Post date: [November 25, 2024, 5:58pm UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129/16 "2024-11-25T17:58:56Z")
@nithin any idea on the volume / orders drop post the 2% margin increase for 0DTE. i could sell only half what i used to do earlier in hedge position.
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### Author:  [@siva](https://tradingqna.com/u/siva)
#### Post date: [November 26, 2024, 3:17am UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129/17 "2024-11-26T03:17:31Z")
> [@Sriharan](#):
>
> any idea on the volume / orders drop post the 2% margin increase for 0DTE. i could sell only half what i used to do earlier in hedge position.
Too early to decide, give it couple of weeks more, we will only publish something out, also at retail brokers end most trades will be on long side, need to check how the overall volume at NSE is changing in next two weeks and then compare with our volumes.
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### Author:  [@siva](https://tradingqna.com/u/siva)
#### Post date: [November 26, 2024, 3:18am UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129/18 "2024-11-26T03:18:40Z")
> [@sanjeev\_rai](#):
>
> Or any alert from zerodha, regarding what additional margin is needed.
We are sending kite notification one day early for those who are carrying short positions which are going to expire on next day.
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### Author:  [@Vidhya](https://tradingqna.com/u/Vidhya)
#### Post date: [November 26, 2024, 3:57am UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129/19 "2024-11-26T03:57:41Z")
SEBI seriously requires a better leadership. All this cockamanie ideas are becoming a pain to deal with. In the name of protecting Retail, they are bringing up arbitrary regulations without a sound reasoning behind them.
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### Author:  [@Dorkstar1](https://tradingqna.com/u/Dorkstar1)
#### Post date: [November 26, 2024, 4:02am UTC](https://tradingqna.com/t/margin-requirements-for-hedged-trades-up-by-80/176129/20 "2024-11-26T04:02:24Z")
> [@Vidhya](#):
>
> SEBI seriously requires a better leadership.
[Finance Ministry to Initiate SEBI Chief Appointment Process in November 2024](https://www.ndtvprofit.com/economy-finance/sebi-chief-appointment-process-begins-november-2024) Madam, why don’t you apply!