Let’s say I create a Put calendar spread when Banknifty is at 49000 and Zerodha blocks a margin of 30,000 for 1 lot.
Now suppose Banknifty falls to 48000. As this is against the sold leg of my calendar spread, will the margin requirement increase from 30,000? If yes, by how much?
Awaiting response.
Even @Sensibull doesn’t show any margin variation when I shift the Banknifty slider left or right. Does this mean that margin remains the same?
Hi @paekut
The margin requirement will increase to the extent of the MTM loss in the short option leg
We’ve discussed this in detail in the thread below.
Thanks @Meher_Smaran . Though a few more points: [let’s assume we are talking about the Put Calender Spread which is a fully hedged position and hedge is not broken at any time]:
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Here, Sam says that the position won’t be squared off. But in another thread, Nithin mentions that they can be [The superiority of spreads and their absolutely dismal state – #19 by nithin]
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In one message in the thread you shared, Sam says that short margin penalty will be applicable. But in another he is saying that there will be no margin penalty. Can you clarify?
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What happens at Wednesday EoD [around the end of expiry, let’s say at 3:25 pm] if the bought leg’s premium is close to zero. Will my position be treated as a naked sell? If yes, will the margin requirement increase exponentially?
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“If the market is going up, it make sense to go with Put calendar spread. And vice versa [market falling, Call calendar spread better] .” Is this true? We are talking in terms of margin requirement not going up.
Just a feature request from @Sensibull – the margin requirement should correctly reflect the actual margin as we slide the market slider, I think it would give a better understanding of margin fluctuations before entering into a position.