New margin framework - sample calculations

Option buying doesn’t require margin, so no changes there.

I want to know when we pledge share with broker how safe is that? Recently there was a incident where the broker used it for another purpose.

There is a change in the pledging process that is coming through. Check this

Is this gonna effect to New Margin framework …Applicable from 1st June 2020??

No, this is different, I believe this is moved to August.

Sorry for taking this thread slightly off-topic… this post is last from my side here on this… if one wants to continue then please post here

With all respect to you my friend,

@Sensibull Pro’s daily cost (Rs.4680 / 180 days = Rs.26 a day) equates to running a ceiling fan daily or may be 2 wada pau daily or may be smoking three Gold Flakes daily… that’s almost free man!

Point is not that… what I am trying to portray is that if one actively deals in Option (not day trading options), the person need correct numbers - off course there are many other ways (like we can built our own spaceship) and tools and platforms… but when one gets all dished out in one single place - then why not appreciate!


But then one has to bear live data cost otherwise rely on hassling with maintenance of NSE’s EOD for FNO and EQs.

As long as one does not day-trade options… I have not faced not much of an issue with them…
Sure constant improvement is expected from @Sensibull to stay in the game and hope they are on it!

My thoughts only (don’t care to be wrong) - Day trading options does not make sense and cannot provide consistent return - risk of ruin is imminent in due course of time under any circumstance… first one’s capital is exposed to exponentially high leveraged risk, secondly Options are meant for hedging (not trading) and its good to keep things “as is”…

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Liquid fund has better return than liquid bees… which is safer?

Liquid bees are little safer comparatively to liquid funds as per my opinion.

@siva will there be reduced margin for strangle as well?

Don’t think so, their losses are unlimited right?

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@siva can you now confirm the exact time when the margin calculator will be updated? Worst case Monday morning 9am?

okk i understood

Should be, will try to do as and when we get files from exchange.

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@siva, I think it will reduce little bit, as per new calculation for nacked calls span margin is increased and exposure margin reduced. For selling call and put together we will get more span margin benifit. My assumption could be wrong.

I don’t think so anyhow in couple of days we will know.

@siva This new rule, will impact option premium ?

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Awaiting new margin requirements… Does look like straddle strangle should see reduced margins as there is no Short option minimum and exposure is also lower. Span reduces a lot in straddle, strangle… lets see!

Hey @siva and @MohammedFaisal could you please update the required margin for an example butterfly strategy too? Thanks.

You can test it on the margin calculator page. The margins are according to the new framework that goes live on Monday.

You can check this on the margin calculator.

While SOMC is nil and exposure is lower, for straddles and strangles, the SPAN margins have gone up due to the PSR range has broadened from 3 sigma to 6 sigma. Hence, you wont get the same benefit, you get with an iron condor or a butterfly.