Search for an answer or browse help topics to create a ticket


Show moreless
View all categories

What is the required and the final margin in a basket order?

In a basket order, Required margin refers to the funds required to place the basket order. However, Final margin refers to the funds blocked in the Zerodha account after the basket order is executed. The final margin is not a separate margin that should be added, but it will be blocked from the required margin after execution. To learn more about basket orders, see How to place basket orders on Kite?

Example Scenario

Suppose Mr A places a basket of options spread in Nifty options, i.e. BUY NIFTY SEP 15500 CE and SELL NIFTY15700 CE.

Mr A needs to maintain a required margin of 1,20,104.55/- to initiate the order. However, when the order is executed, only 29,422.05/- will be blocked.

Let's understand how the final margin in an options spread basket order is calculated:

When Mr A short/writes an option as an option seller, he receives the premium, which is then debited to ascertain the final margin.

Considering the previous example:

The required margin to place a short order without the spread is 2,05,943.80/-

Since a spread basket order has been created, the margin requirement for the short order reduces to 19,354/-.

The premium received here is 90,682/-, as seen in the buy order window.

Hence, the final margin is calculated as 29,422.05/-, which is the required margin minus the premium (1,20,104.55 - 90,682.50).