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.
Common reasons margins go up
- Risk model updates (SPAN/PRISM): Changes to shock, volatility, or correlation inputs can raise initial margin.
- Volatility spikes: Wider expected price ranges increase VAR and exposure add-ons.
- Event risk: Budget days, policy decisions, earnings, or major data can trigger temporary hikes.
- Spread or hedge benefit changes near expiry: Some offsets reduce or do not apply on the last day.
- Concentration or liquidity checks: Large OI, thin depth, or wide spreads can attract extra margins.
- Physical delivery window (stock F&O): Approaching expiry increases funding needs for in-the-money stock derivatives.
- Regulatory circulars or special margins: Additional exposure margins or premium-collection rules for extreme strikes.
- Broker RMS overlays: House risk thresholds may tighten during stressed markets.
What to do right now?
- Quantify the gap: Open Funds or use the Margin Calculator to see required versus available.
- Top up funds immediately: Use Add funds for an instant credit to avoid risk reductions.
Reduce requirement if needed:
- Trim size or close legs with the highest margin impact.
- Add or adjust hedges so offsets are recognised. Prefer listed spreads over naked shorts.
- Place legs as a Basket Order so the combined margin is computed in one go.
- Recheck after execution: Refresh margins and confirm the shortfall is cleared.
- Plan for expiry and delivery: If holding stock F&O near expiry and you do not want delivery, square off or roll before the cut-off.
Resolve shortfalls the same day by topping up funds, right-sizing exposure, and using basket execution so eligible margin offsets apply even during volatile sessions.
What if...
| Scenario | Resolution |
|---|
| Margin increased unexpectedly | Check the Margin Calculator and latest notices. Add funds or reduce risk to clear the gap. |
| I cannot add funds in time | We may square off your position to manage risk if the margin is not met. |
| My spread still shows a high margin | Place as a basket so offsets apply together. Verify if near-expiry rules withdrew credits. |
| Volatility spiked and margins jumped midday | Reduce exposure, add defined-risk hedges, or top up to maintain a buffer. |
| Near stock-derivative expiry | Roll or exit ITM-risk legs to avoid delivery-related funding spikes. |
Last updated: 06 Nov 2025
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