Settlement related query with FNO


I needed some clarifications on margin requirements for a specific scenario involving both futures and options. Lets say that there is a stock with lot size 500 and CMP 200. I have bought current month Futures at 205 and sold ITM call 160 strike price for 210. Since the spread ratio is 1:1, do I need to account for adding additional margin 4-5 days before expiry OR whatever current margin requirements was used is good enough and no additional margin is needed from settlement perspective?

Other question that I had was on the P&L calculation. If the stock closes at 230 on expiry day, will the future’s closing price be determined as 230 only or will future will have a different settlement price?


Additional margin requirement from expiry minus 4 days is only for ITM long stick options.

For futures contract and short options, the margin requirement will increase on the expiry day to 50% of the contract value or 1.5 times NRML margin (whichever is lower). You can learn everything about physical settlement here: What is Zerodha's policy on the physical settlement of equity derivatives on expiry?

On expiry day, the futures contract will be settled at tbe closing price of the spot.

Thanks for the details. In the example that I had given, it was a short sell ITM option, not a long position. So for short ITM option, does that still need 50% contract value as margin? I didn’t see anything about it in the link. Can you please clarify?

Ah, my bad. Yes, for short option position the margin requirement will be 50% of the contract value or 1.5 times the NRML margin (whichever is lower), on expiry day.