Comment on New margin framework for F&O trades

Faisal commented on 14 Aug 2020, 12:24 AM

SPAN covers the maximum risk of the hedged position. However, SEBI mandates exposure margin to be collected at 2% of the contract value for index and 3.5% of the contract value for stock F&O. This is included to ensure that additional liquidity risk of the hedged position is covered. For example, you can close the long 9700 CE leading to unlimited risk for the short call(9600 CE).

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