Options Trading

What happens if I have margin premium obligation towards Exchange and have an open position under Options Buy Call Put?

If you’ve bought Call or Put options and have an outstanding margin or premium obligation towards the exchange, your positions may be squared off in the following scenario:

- Buying Options Using Shares as Margin (SAM)

If you used Shares as Margin (SAM) to buy options and carried the position beyond intraday, the full premium becomes payable at the end of the day. If your cash balance is lower than the premium amount, you’ll get a cash pay-in obligation for the shortfall.

Example:

Let’s say:

1. You bought options by paying a premium of ₹1,00,000 using the Shares as Margin (SAM) facility

2. You didn’t square off the position during intraday.

3. Your available cash limit is ₹50,000

Then:

You will receive a pay-in obligation for the shortfall — i.e., ₹50,000 (₹1,00,000 – ₹50,000).

Buying an option requires paying a premium upfront. If you’re unable to meet further margin/premium obligations, the trading system can liquidate your option positions. This ensures no default to the exchange and protects you from accumulating losses due to non-fulfilment of obligations.