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Why is higher than usual margin blocked for my F&O trades close to expiry?

If you do not have any F&O trades, higher margins will not be blocked.

The margin blocked for F&O trades can increase:

  1. Four days before expiry (previous week Friday to expiry day) if you have open in-the-money options positions 
  2. One day before expiry (Wednesday & Thursday of expiry week) if you have any open F&O position required to be physically settled or any out-of-the-money short options positions. 
You can check the increased margin requirement on our margin calculator or on the Kite order window as shown below:

 

Physical settlement means that you will have to give or take actual delivery of the underlying stock. As such, the required margin goes up in proportion to the contract value. 

Learn more about physical settlement and higher margins in this article.