What is SEBI new rule for margin for option buyers?

F&O
1

Suppose I am long, bought a call option of a stock. It is OTM as of now and it is beginning of the month. Now in a week it becomes ITM. Also, suppose I bought OTM call with entire capital, and none is left in the account, or meager amount is there.

Having this scenario, do I have to keep money in my account for margin requirements, it’s the second week. I want to be still long because I believe this option may go even deeper ITM. The question is if it goes more ITM, do I have keep more money in the account? Is it required/necessary to have capital or I can play it till the third week, and square it off before the 4th week starts without keeping any capital in the account.

This question is mainly for the broker. If I don’t keep capital and my call option is ITM, will I be penalized at the EOD?

2

The increased margin requirement for a long ITM position starts from 4 days before the Expiry. If you don’t intend to carry physical delivery risk, best to close all stocks F&O positions before the last week of expiry.

If trading with Zerodha, everything is explained in the support article below: