New Margin Framework incorrect calculation


So I am trying to create some hedged positions but I am seeing a margin requirement that looks more that what it should be.

I bought 2 Nifty lot of 10000 PE Dec expiry.

I tried to go long in Nifty Jun Fut, For 1 lot it shows margin requirement is around 15K which seems reasonable, but if I try to buy another lot margin requirement is suddenly around 75K, or when I tried to buy two lots of Nifty Fut it shows around 1.4Lacs margin required.

Is there possibly a bug, or is it because of different expiry, even with that long position is completely hedged, why margin is still so high?

Any help in appreciated.

Thanks In Advance.

There is not a bug. When you Buy 1 lot of Nifty FUT, margin required is around 140k, when you hedge it with 1 lot of Put options it comes down to 20k and further down to 15k if you buy second lot because your risk is even more less now. When you’re adding another lot of Nifty FUT what is happening is your risk is increasing, even though your position is hedged your risk or max loss has increased, that is why margin shoots up. Now if you hedge 2 lots of FUT’s with 4 lots of PUT’s your margin will again drop to 30k because your max downside on the trade has reduced.


I have been doing this for about a year now, same setup 1 lot of Nifty long against 1 lot of Nifty Fut, it has been around 40K for each lot but after new margin framework it has now gone higher, Margin calculator shows it around 60K for 2 lots. why would it be different on kite?

Check this,

And this,

@Siva can you.

Options are for december right? so margin calculator can’t be right in this case. So place a limit order for futures and check how much system is blocking?

@siva Yes these are for DEC expiry to have lower theta, which in my opinion should actually reduce margin even further like it did in past for me. I just took Aug expiry PE as an example.

I checked with Limit Order, its still same,

I mean place a limit order in the system so it won’t execute and check how much is blocking.

Asking for even more, this time around 90K.

So, that is correct only, more margin is required because put are of december expiry.

Ok, so to hedge using longer dated options margin required will be higher.

@siva Feature Request: As of now margin calculator doesn’t allow Nifty weekly and longer dated options, can this be added? Usually Jun/Dec Nifty options are liquid enough and are traded for long term hedge against portfolio.