The latest margin requirements can be checked on Zerodha’s margin calculator (WEB).

The margin required for F&O trading changes throughout the day, and these changes are reflected in the SPAN files provided by the exchange at various times during the trading day. However, exchanges require that clients maintain margins as per the beginning of the day (BOD) SPAN file. This initial margin, as per the BOD file, is blocked for the entire day, even if the margin requirement changes due to market movements. To know why BOD margins are considered for the entire day instead of the latest SPAN margins, visit tradingqna.com/t/peak-and-eod-upfront-margin-penalty-changes-from-may-2-2023/146585.

However, margins can increase drastically due to volatility, and traders won’t be aware of this since the margin is still blocked as per the BOD file for their positions. Zerodha updates the margin calculator to reflect the latest requirements, allowing traders to check and add sufficient funds to their Zerodha account. The final SPAN file, which captures any price movements in the instruments during market close, is uploaded to the margin calculator by 7:00 PM.

It is recommended to keep sufficient funds in the Zerodha account above the margin requirement, with a 5% buffer being sufficient on most days if there are no significant price changes. If the margins are not added to the Zerodha account in case of a shortfall, Zerodha may square off the position the following trading day.

Did you know? The upload of intraday SPAN files to the margin calculator may vary depending on the file's availability from the exchange.

Example Scenario

A client takes a Nifty future position in their Zerodha account.

1. Initial Margin (Beginning of the day margin): The initial margin of ₹1,00,000 is blocked for this position.
2. Changing margin requirements: Throughout the trading day, the market experiences significant volatility, and the margin requirements change at various points during the day.
3. SPAN Files update: The exchange releases SPAN files periodically, reflecting the updated margin requirements based on changing market conditions.
4. Margin blocked: Despite the increase in margin requirements throughout the day, the margin blocked for this position will still be ₹1,00,000 for T day. However, the increased margin may affect the minimum margin requirement on the next trading day.
5. Using the Margin Calculator: The client checks Zerodha's margin calculator (WEB) and realises that the margin requirement has increased to ₹1,05,000 during the trading day due to a sudden price movement.
6. Adding additional margins: In response to the increased margin requirement, the client added ₹5,000 to the Zerodha account to fulfil the additional margin requirement. This additional margin is not blocked for the open position on the same trading day.