What Should I Do in a Margin Shortfall?
A margin shortfall means your available funds are below the exchange or broker requirement for your open positions. At FYERS, you should act quickly when alerted to avoid risk actions such as forced position reduction or penalties. This article lists practical steps, funding choices, timeline signals, and common outcomes.
- Confirm the gap in the Funds section or the Margin Calculator to see required versus available.
- Add funds or reduce risk right away to restore compliance.
- Recheck after action to ensure the shortfall is cleared, especially during high volatility.
Funding options to fix the shortfall
- Add funds instantly through the funds section for a real-time top-up.
- Trim or close positions to reduce margin requirements.
- Convert positions where allowed to product types with lower intraday margin sensitivity if that matches your intent.
- Use hedges or spreads so that offsetting legs reduce net risk and required margin.
- Exit illiquid or far strikes first to free margin quickly with minimal slippage risk.
Timelines and alerts
- Act on alerts immediately. Margin requirements can change quickly during volatile moves.
- Same-day resolution is best. If the deficit persists, risk controls may reduce positions to bring your account back within limits.
- After each action, refresh margins. Recalculate the combined margin if you used spreads or baskets.
Penalties and risk controls
- Forced reduction or square off may occur if the shortfall continues.
- Statutory or exchange penalties can apply for persistent or end-of-day shortfalls.
- Order placement limits may be enforced until margins are adequate.
To avoid shortfalls
- Keep a buffer above required margins during volatile sessions.
- Place the hedge leg first or use Basket Orders for combined margin credit.
- Avoid holding large naked shorts near events or expiry.
- Monitor delivery risk for stock F&O near expiry, since physical settlement can increase funds needed.
Resolve shortfalls the same day by topping up funds, reducing or hedging exposure, and verifying combined margin with the calculator or basket before sending new orders.
What if...
| Scenario | Resolution |
|---|
| I received a margin call alert | Add funds immediately or reduce positions to clear the deficit. |
| I cannot arrange funds in time | Close or reduce positions. If not addressed, risk actions may reduce positions. |
| I trade spreads, but still see a shortfall | Execute the buy hedge first or use Basket Orders so the combined margin applies. Refresh the margin after execution. |
| Volatility increased margins during the day | Cut size, add hedges, or top up funds to restore the buffer. |
| I am near expiry on stock F&O | Square off or roll to avoid delivery-related funding spikes if you do not want delivery. |
Last updated: 06 Nov 2025
Related Articles
Why Did Margin Requirements Increase?
Margin can rise even when your position size is unchanged. Exchanges and clearing corporations periodically recalibrate risk models, widen shock scenarios during volatility, or apply special margins. Brokers then pass through the higher requirement. ...
What is a Daily Margin Statement?
A Daily Margin Statement is a SEBI-mandated report sent to your registered email every trading day after market close. It helps you monitor your margin status, avoid penalties, and stay trade-ready. What does it include? Margin required for open ...
Why Do Margin Blocked and Available Funds Differ on FYERS?
It is normal to see a difference between margin blocked and available funds on FYERS. Margin blocked shows what is reserved for your open orders or positions. Available funds reflect what you can still use after credits, debits, premium effects, and ...
What Happens If I Don’t Square Off My Intraday F&O, Currency, or Commodity Positions Before Market Close?
At FYERS, if you don’t manually close your intraday F&O, currency, or commodity positions before the market closes, our Risk Management System (RMS) will automatically take necessary steps to manage overnight exposure and safeguard your account from ...
What Happens When an In-the-Money Commodity Options Contract Expires?
At FYERS, when an in-the-money (ITM) commodity options contract expires, it does not settle in cash like equity or index options. Instead, the option is automatically exercised and converted into a futures position of the underlying commodity, such ...