Why am I asked to bring margins when I have bought stock options?
For long In the Money (ITM) options, the exchange requires physical delivery margins to be maintained starting from four days before expiry (E-4).
- The margin requirement changes daily over the four days.
- It is charged as a percentage of applicable margins: VaR + ELM + Ad hoc.
- Margins must be maintained at the beginning of the day (BOD).
| Day | Applicable Margin |
|---|---|
| E-4 (Friday BOD) | 10% of VaR + ELM +Ad hoc margins |
| E-3 (Monday BOD) | 25% of VaR + ELM +Ad hoc margins |
| E-2 (Tuesday BOD) | 45% of VaR + ELM +Ad hoc margins |
| E-1 (Wednesday BOD) | 70% VaR + ELM +Ad hoc margins |
At Geojit, we have additional margin requirements for the last day (E-1, Wednesday) and the expiry day (E, Thursday). We require 50% of the contract value (inclusive of exchange stipulated margins) to be maintained.
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