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How do I calculate physical delivery margin? 

Physical Delivery Margin is the margin needed when you hold certain Futures & Options (F&O) positions until they expire, leading to the actual delivery of shares instead of cash settlement. This mainly applies to long (buy) In-The-Money (ITM) Stock Options (Calls & Puts).

Key Components:
  • VAR Margin (Value at Risk Margin): Covers potential losses over a specific time.
  • ELM (Extreme Loss Margin): Additional margin for extreme market movements.
  • Ad hoc Margin: Extra margin the exchange might require due to market conditions or volatility.
To find the exact 'Total Delivery Margin', use the NSE margin calculator or check the contract details on Groww.

Margin Requirements as Expiry Nears:
  • T-4 days: 10% of the Total Delivery Margin
  • T-3 days: 25% of the Total Delivery Margin
  • T-2 days: 45% of the Total Delivery Margin
  • T-1 day: 70% of the Total Delivery Margin
  • T day (Expiry Day): 100% of the Total Delivery Margin
Example:
If you have +500 buy positions of Reliance 2500 Call expiring on 30th September, first use a tool like the NSE margin calculator to find the Total Delivery Margin. Let's say it's ₹1,92,961.67. On T-4 days (e.g., 26th September), you would need 10% of this amount, which is ₹19,296.17, in your Groww balance. This amount increases to 100% by the expiry day.

Important Note: Keep an eye on your ITM stock option positions and ensure you have enough funds in your Groww balance as expiry approaches. Not maintaining the required physical delivery margins may lead to automatic square-off of your positions by Groww to avoid regulatory penalties.
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