Why is the entire margin required to enter into a hedged position?
The full margin will be required to sell (short) options or execute futures before placing a buy hedge position. However, placing the buy option orders before the future or short option orders will execute the hedge position with the least margin requirement. To learn more, visit tradingqna.com/t/benefiting-from-the-new-margin-framework-an-example/80658.
Example scenario
The required margin to sell Nifty April futures is ₹1,06,899.21.
The final margin required after hedging the sell position with a buy position is ₹44,198.38.
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