Understanding margins is important for F&O trading, as it determines how much money you need in your Groww account. Here's how it's calculated based on the type of F&O position:

1. Buying Options (Long Call or Long Put):

Margin Required: The premium amount you pay.
Note: For In-The-Money (ITM) stock options held until expiry, Physical Settlement Margins will apply as these can lead to actual delivery of shares.

2. Selling Options (Short Call or Short Put) and Trading Futures:

Margin Required: SPAN Margin + Exposure Margin + Any Additional Margin.
SPAN Margin: The minimum margin required by the exchange.
Exposure Margin: An extra margin to cover extreme market movements.
Additional Margin: Extra margins might be applied by the exchange or Groww based on market conditions.
Physical Settlement (for Stock Options & Futures): If held till expiry, Physical Settlement Margins will apply on top of or instead of regular margins.

3. Physical Settlement Margins (for Stock Options & Futures):
This applies to stock options and futures that lead to physical delivery of shares. As expiry approaches, the required margin increases:

T-4 days: 10% of the full delivery value
T-3 days: 25% of the full delivery value
T-2 days: 45% of the full delivery value
T-1 day: 70% of the full delivery value
T Day (Expiry Day): 100% of the full delivery value

Key Points to Remember:

Index Options (e.g., NIFTY, BANKNIFTY): Always cash-settled, no physical delivery margins needed.
Stock Options & Futures: May require physical settlement. Ensure enough margin in your Groww account one trading day before expiry to avoid penalties or automatic closure of positions.
Real-time Calculations: Margins change with market volatility. Check the exact margin required for a specific contract on the Groww platform.

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