Comment on ZT-Spread Orders

Nilesh commented on 30 Nov 2017, 12:16 PM

Theres a slight issue wrt the Margin calculation for spreads I think. Consider a customised Call spread (i.e. slightly different than the usual call spread) with both legs having same maturity i.e. say Nifty spot is at 10500 and so you Buy Nifty 25 contracts 10600 Calls on Expiry Dec 2017 and Sell Nifty 25 contracts 10400 Calls on Expiry Dec 2017. This means the short call obviously is ITM and needs margin and the long call is OTM and needs premium to be paid. So given that its a spread for same underlying and same expiry the margin needed on the short call side must be drastically reduced (due to the long component in the other leg) as compared to a position which purely has a short call position. This is not observed on the Zerodha margin calculator. Can you kindly explain why is it so?

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