There is a change in F&O Margin Policy again? Can somebody explain how this will affect us?


#43

Margins have been updated to alert you that there is a margin revision from Monday. Positions won’t be squared-off as long as you hold margins as per the existing policy. You can find the old margins here.


#44

Email/message from Zerodha does not mention the clarification you posted. This is the email I received from Zerodha.

Dear ZXXXXX, Your Margin utilization has reached 146.28% of your available balance.Please add funds to your EQUITY trading account immediately to avoid square off of your position.To add funds please go to https://kite.zerodha.com/funds Team Zerodha


#45

I am unable to understand this increase in margins for stock options. Today my margin utilisation had been increased by 14 percentage while the spreadsheet you mentioned had mentioned only 0.9 percent increase in margin for the stock which I am holding.
Please clarify this.


#46

The calculation shows that the increase is margin is about 40 - 45%. However, there is another broker Direct, where the message is that margin will only increase by 2%. I think there is difference in interpretation by the 2 brokers.


#47

have you checked their margin ? for ex to sell nifty 10000pe margin is 76000 ,how is their requirement ?


#48

I just checked. It is ~57000. This is for NIFTY 31Jan 10000PE


#49

Now it’s not worth to sell deep OTM Options.
NSE & SEBI just want us to buy option.


#50

Prakhar the margins shared in the sheet are Future contracts only. It would differ for option contracts. Check the margin calculator for accurate margins.


#51

ROI will go down significantly bro. Sabki lag gayi


#52

Which broker?
Everyone will have to update the same SPAN+Exposure by Monday anyway. Today Zerodha did it early to warn us I guess


#53

The excel shows that the increase in margin requirement is only increasing by a few %. Whereas in Zerodha, the margin requirement shot up by 45%. This is for a set of NIFTY/BANKNIFTY options. The increase in the other broker is < 5%. I am at a loss on the calculation logic.
If someone can explain how the margin requirement has gone up by 45%.


#54

The margin increase illustrated in the sheet is for Future contracts only.

For Deep OTM index options(Nifty/ Banknifty), Short Option Minimum has gone 3.24% of the contract value which is roughly 24k higher than the old margins(which is the reason for the 45% increase)


#55

I understand. However, the change in Zerodha is too high and that I am unable to understand. I had to exit 30% of positions in Zerodha whereas in the other broker, no exits.


#56

Yes but like you mentioned SOM is not applicable for stock options then why their margin increased by 14 percentage while future margin of that stock is increasing maximum by 1 percentage.
That is what I am unable to understand.
Thanks.


#57

The margins are updated exactly as per the SPAN and Exposure file released by the exchange daily. On Monday, if these margins aren’t met, there will be a margin penalty. We updated it earlier because we wanted to all our clients that there is an impending margin increase.

Can’t comment on the policy being followed by your other broker.


#58

This is seriously problematic for deep OTM sellers. To get the same returns, one will have to short options closer to ATM, which will obviously increase the risk. Might as well put the money in a bank in the form of an FD.
Not optimistic but hope SEBI reconsiders this…


#59

Thanks for updating it earlier. I suggest someone does an investigation along with other brokers. The margin requirement of for NIFTY 31Jan 10000PE short is 57000 for the other broker. In Zerodha it is 75000.


#60

May be you can check margin for the same contract on monday with that broker.


#61

Sure, will do. Is not a discount broker.


#62

even I have this point in my mind @Prakhar_Agrawal. Hope someone answers