Comment on Policy on settlement of compulsory delivery derivative contracts — Update Oct 2019
commented on
19 Nov 2019, 06:02 PM
Akshay,
1. Starting from October 2019, all Stock F&O contracts are being physically settled, hence, the margin is increased for all of them.
2. Yes, increased margins will apply on both the hedged positions, this is due to the risk of the client exiting either one of the legs of the hedged portfolio before expiry leading to physical delivery. However, on expiry, these hedged positions will be netted-off.
3. For short call OTM options, the margins will increase. For long call OTM options, there won’t be any additional margins as long as the position remains out of the money.