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What is Value at Risk (VAR), Extreme Loss Margin (ELM), and Adhoc margins?

Value at Risk (VAR) refers to the potential loss that might occur while dealing with securities for a given timeframe. VAR margin is required to cover up for the losses arising due to uncertain risk conditions.

VAR margins are covered for a single day for Liquid securities and three days for illiquid securities.

Extreme Loss Margin (ELM) is the margin blocked in addition to the VAR margin. ELM is blocked for risk situations that are not covered in the VAR estimation.

Adhoc Margins are special margins blocked on specific securities depending on the nature of the security.


In Zerodha, the entire margin is required upfront for your equity delivery trades.

For intraday, margin requirements are specified here .

Adhoc margins are denoted as ‘ delivery margin ’ on the Kite funds page.

Due to the new margin rules , any insufficient margin (VAR+ELM+Adhoc) may lead to a margin penalty.