NRML to MIS Conversion on Monthly Expiry Day in Futures for Calender Spreads

F&O
1

Hi,

Suppose I have 4 Calender Spreads for Scripts such as RELIANCE,TCS,INFY and LT Futures cotracts.
On Monthly Expiry day, the margin for current month futures increased.

Futures and Short Option (Calls & Puts) positions.
The margin requirement for all stock Futures and short options contracts increases on the expiry day to 40% of the contract value or SPAN + Exposure(whichever is higher).
The additional margin increase will reflect in the exposure margin field on the Kite funds page.
For example, if the SPAN + Exposure margin required for ICICI Bank futures is 25%, it will be 40% of the contract value on the expiry day.
This increased margin requirement on the expiry day is updated on our margin calculator and on the order window. See Margin calculator.

My query is,

  1. If I convert my all Calender Spreads position from NRML to MIS on expiry day,will I get margin benefit?

  2. As I’m converting my all Calender Spreads position’s to MIS on expiry day, all position will be squared off before 3:30 pm by CRM System incase I forget to square off manually and I don’t have to go for physical settelment. Is it Correct??

Facing issue with margin with calender spreads on Monthly Future Expiry Day,missed good profit’s in Jul Expiry on cal spreads as I exited all cal spreads on Wednesday only due to margin requirements. :unamused:

2
  1. NRML and MIS require the same margin, so conversion won’t give any margin benefit. If for some reason MIS position not got squared off (Either circuit hit or any technical issues) client will have to go through physical delivery with NRML margin on expiry day. As it is risky it is not possible to give benefits in MIS on expiry day.
  2. MIS position will be squared off at 3.25 PM for F&O segment.
3

Thanks for reply