Margin benefit is not provided for the covered call strategy in Zerodha because exchanges do not offer margin benefit for stock option positions against the underlying stock held in the client’s portfolio. While margin benefit is available for futures positions, providing cross-margin benefit within the existing framework is operationally challenging. The broker would need to upload files with specific details, and even if they intend to offer this facility, they must meet certain clearing and settlement criteria, which are currently difficult to fulfil.

Additionally, there are a few points to consider apart from the operational complexity:

• Spread benefit is only passed for futures and not for options.
• Portfolios with hedge benefits or calendar spreads will not receive cross-margin benefits since these portfolios are already covered for risk. To learn more, visit nseindia.com/products-services/equity-market-cross-margining.
• The portfolio should be an exact replica of the index, meaning the number of shares in the holdings or the stock futures position should be equal to the lot size, and no partial benefit is provided.
• If a client has a short delivery position against their holdings and fails to square off or roll over, their shares will be debited towards the obligation.
• Cross-margin benefit can only be given for index and stock futures if they belong to the same expiry months.