Query for option

Zerodha
1

I have a call option of pvr @1400 ce can anyone help me explain this

We see that you have an open position in a contract with compulsory physical delivery. All Stock F&O positions will attract a physical delivery margin during the expiry week as below:

  1. Futures and short options — Margin blocked will be increased to 40% of the contract value or SPAN + Exposure margin prescribed by the exchange(whichever is higher) on Thursday(Expiry day).
  2. Long in-the-money(ITM) options- On Wednesday and Thursday, the margin blocked will be 50% of the contract value.
  3. Long out-of-the-money(OTM) options- There will no additional margins blocked for OTM options positions. However, if your position turns in the money(ITM), margins of 50% of the contract value will be blocked.
2

Stock Futures and ITM Option positions are physically settled upon expiry. What this means is, if your 1400 Call Option expires ITM, you will have to take delivery (if you have bought the Option) or give delivery of underlying shares (if you have sold the Option).

Hence there are increased margin requirements close to expiry. You can check out this support article for more information on physical settlement.

3

Thankyou but can I sell this tomorrow without any margin

4

Yes, you can. You don’t need any margins to exit your position.

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