+91 22 62 43 43 43   

  • Call Me
  • Open Account
    • Open an Account
    • Fill Online Application
  • Margin Calc
  • IPO
  • Trading Login
    • ProStocks STAR
    • ProStocks Star Colo
    • ProStocks Star Web (Beta)
  • Backoffice Lite
ProStocks.comProStocks.comProStocks.com
  • Login
    • ProStocks STAR
    • Backoffice Lite
    • Backoffice Advance with Silver Light
  • Home
  • NRI
    • NRI Trading
    • Non-PIS NRO Trading
    • NRI Brokerage Calculator
    • NRI FAQs
  • API
    • ProStocks Star API
    • API Documentation
    • API SDK
  • Pricing
    • Pricing Plans
    • Brokerage Calculator
    • Margin Calculators
    • Trading Account Charges
    • Demat Account Charges
    • Stamp Duty Charges
  • Why Us
    • Why ProStocks?
    • Compare Brokers
    • Refer & Earn
    • Become a Partner
  • Trading
    • Trading Platforms
    • Collateral Pro
    • Fund Transfer
    • Trading Holidays
    • Minor Account
    • HUF Demat Account
    • FoxTrader
    • CDSL eVoting
  • Support
    • Contact Us
    • FAQs
    • Downloads
    • User Guide
    • Advance IVR
    • Blog
    • Press & Media

Return To ProStocks

  1. ProStocks
  2. Support
  3. FAQs
  4. Margin
Margin
27 October 2020
Hits: 17181

How Additional Physical Delivery Margin on Long In-the-Money Stock Options Contract (ITM) works during Friday (Friday before expiry Thursday) to Expiry Thursday.

  1. Futures and Options on underlying equity stocks are settled by Physical delivery of shares. Futures and Options on indices are settled in cash ( cash here means non delivery through banking channel and not actual physical cash). Futures and options on TCS , Reliance etc are example of Stock Futures and Options as underlying is individual scrip. Futures and Options on indices ( index) on Nifty50 , Bank Nifty, Fin Nifty etc are example of Index Futures and Options as underlying is basket of scrip and not individual stocks.
  2. Additional Margin to be charged for Physical settlement of Stocks Futures and Options:
    1. Due to compulsory physical settlement in Stock Futures and Stock Options, Clearing Corporation face risk for collecting higher margin at the time of expiry date.
    2. Exchange/ Clearing Corporation charges physical delivery margin as a percentage of Underlying stock which is levied from expiry minus 4 trading days for long ITM ( In the Money) options ( starting Friday before expiry Thursday and in case of any trading holiday in between than those earlier than Friday as rule is 4 trading minus expiry day ). To handle the same in Trading Application, additional margin will be charged for stock Option Net Long ITM contracts as below:-
      • For E-4 days 10% of (VAR + ELM + Adhoc Margin of Underlying Asset * Qty * Strike Price)
      • For E-3 days 25% of (VAR + ELM + Adhoc Margin of Underlying Asset * Qty * Strike Price)
      • For E-2 days 45% of (VAR + ELM + Adhoc Margin of Underlying Asset * Qty * Strike Price)
      • For E-1 day 70% of (VAR + ELM + Adhoc Margin of Underlying Asset * Qty * Strike Price)
      • E day 100% of (VAR + ELM + Adhoc Margin of Underlying Asset * Qty * Strike Price)
    3. Above will be over and above of Premium charges. It is applicable only for stock Option Net Long ITM contracts. For identification of ITM contracts, beginning of the day file will be considered and again End of the file will be considered. Due to considering last file , which comes after market closes, options which are not ITM may become ITM post market close or options which are ITM may become OTM( Out of Money).
    4. Optionally, ProStocks on last two days depending on volatility etc certain percentage say +/- 2 % would be applied to determine ITM e.g. Call of Strike Price Rs 100 would be treated as ITM when underlying is at or above Rs 98. Such margin may be applied on intraday, CO and BO position also depending on volatility, risk perceived at the discretion of the ProStocks.
    5. Futures and Options on indices are not subject to above additional margin as they are settled non delivery. On Expiry day Futures and Options are settled on settlement prices which are volume weighted close price of underlying. Settlement prices are announced post close of market.

People in this conversation

Comments (1)

Sort by Oldest First
Sort by Latest First
Subscribe:
Email
  • Guest - k patel

    about 2 years ago

    whether this additional margin will apply for itm long hedged with near otm short position?

    http://maps.google.com/maps?z=15&q=,
    Share
    Short URL:
    Permalink

Stickies

Lovies

Login to post a comment

Register · Forgot password

Post comment as a guest

    0

    Popular FAQS

    • What is KRA, KYC and IPV?
    • What is DP ID and beneficiary ID in Depository?
    • Who can open account with ProStocks?

    Categories

    • Account Opening
    • Trading
    • Demat
    • Fund Transfer
    • NRI FAQs
    • Back Office
    • Margin
    • Pricing

    Request Call Back



    Please check the reCAPTCHA box.


    • About Us
    • Fund Transfer
    • Fund Transfer FAQs
    • Downloads
    • Sitemap
    • Testimonials
    • Trading Holidays

    Need Help?

    Mumbai Office:
    B-50, Pravasi Estate, Goregaon (East), Mumbai - 400063

    Call us on +91 22 62 43 43 43 / +91 22 46 60 77 77

    Email: [email protected]

    Sunlight Broking LLP
    Registered Office:
    327, Govindam Tower, Old RTO Road, 3rd Floor, Gandhi Nagar, Bhilwara, Rajasthan, India 311001

    Registration Numbers:
    SEBI Regn. No.: INZ000048660 INDP2802016 | BSE Member code: 6635 | NSE Member code: 90084 | CDSL DP ID: 12083200 | AMFI Registration No (ARN): 119535


    Attention Investors

    Prevent unauthorized transactions in your demat account. Update your mobile number with your depository participant. Receive alerts on your registered mobile number for debit and other important transactions in your demat account directly from CDSL on the same day.
    Prevent unauthorized transactions in your trading account. Update your mobile numbers/email address with your stock brokers. Receive information of your transactions directly from the Exchange on your mobile/email at the end of the day. This is issued in the interest of investors.
    Client Registration Documents in Vernacular Languages can be download from here.
    Facility of Clearing Corporation for verification of Client Collaterals , please register on this link
    Investment in stock market are subject to market risk.
    No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account.
    KRA-KYC is one time exercise while dealing in securities markets - once KRA-KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund, etc...), you need not undergo the same process again when you approach another intermediary. As a business we don't give stock tips, and have not authorized anyone to trade on behalf of others. If you find anyone claiming to be part of Sunlight Broking LLP and offering such services, please send us an email to [email protected]

    Investor Grievance: NSE | BSE | SCORE | SMARTODR | CDSL | [email protected]

    Privacy Policy | Disclaimer | Management Policy and Procedure | Investor Charter | Risk Disclosures on Derivatives | KMP Details | Procedure for Filling of Complaint | CKYC | Voluntary Freezing | NATIONAL FINANCIAL LITERACY QUIZ (NFLQ)

    • NSE
    • |
    • BSE
    • |
    • RBI
    • |
    • AMFI
    • |
    • FM
    • |
    • CDSL
    • |
    • SEBI
    © , ProStocks

    ProStocks, A Sunlight Broking LLP Venture

    Please wait while we are processing your request.

    Loading...
    • Login
      • ProStocks STAR
      • ProStocks Star Web (Beta)
      • Backoffice Lite
      • Backoffice Advance with Silver Light
    • Home
    • NRI
      • NRI Trading
      • Non-PIS NRO Trading
      • NRI Brokerage Calculator
      • NRI FAQs
    • API
      • ProStocks Star API
      • API Documentation
      • API SDK
    • Pricing
      • Pricing Plans
      • Brokerage Calculator
      • Margin Calculators
      • Trading Account Charges
      • Demat Account Charges
      • Stamp Duty Charges
    • Why Us
      • Why ProStocks?
      • Compare Brokers
      • Refer & Earn
      • Become a Partner
    • Trading
      • Trading Platforms
      • Collateral Pro
      • Fund Transfer
      • Trading Holidays
      • Minor Account
      • HUF Demat Account
      • FoxTrader
      • CDSL eVoting
    • Support
      • Contact Us
      • FAQs
      • Downloads
      • User Guide
      • Advance IVR
      • Blog
      • Press & Media

    Request Callback for New Account

    Please check the reCAPTCHA box.

    Call Me Now

    For NRI callback, please submit request from NRI Trading