Hi
I usually keep some equity monthly FnO positions which “might” result in physical delivery. As expected I keep adequate margins always, even in week of expiry with heightened requirements.
I liquidate enough debt investments to cover for “cash” requirements in case my options fall in the money and I have to take delivery. This puts little bit of inconvenience if repeated every month.
Now my question is, if I keep only enough margin in account ( collateral as well as cash equivalents), and don’t keep real cash, will I still get my delivery obligations fulfilled?
Example
1 lot Auro pharma 700 sold PE
I am keeping enough margins as collateral plus cash equivalents (pledged liquid funds).
If spot falls below 700, I’m ready to take delivery.
If next thursday if I don’t keep enough “real cash” and only maintain margin requirements, will I still get delivery?(And RMS team will not square off my position citing lack of real cash?).
I am ready to pay 0.05%per day interest for shortfall of real cash.
I hope I have framed my query well enough.
No, I know I have to bring in “real cash” subsequently which I can in a day or two by bank transfer or liquidating debt instruments.
My question is “allowing delivery against enough margins (funds equivalents-1st screen-shot) & charging interest for debit/insufficient balance(2nd screen-shot)”
vs
“squaring off the position by RMS team in expiry week/day citing insufficient ‘cash’ balance”.
Zerodha support page regarding physical delivery “suggests” first option to be the case, as can be seen in screen-shots, but there isn’t enough clarity.
Yes, your position will be physically settled. However, if you do not have sufficient cash, your account will go in debit balance on which interest will be applicable at 0.05% per day.
