Short answer

As per regulations (WEB) introduced on 20th November 2024, an additional 2% Extreme Loss Margin (ELM) is levied on all short (sold) index option contracts on their expiry day. This margin applies regardless of whether your position is intraday or overnight, and even if your position is hedged.

The exchange introduced this extra margin to account for higher volatility seen on expiry days. It helps reduce counterparty risk and protects against sudden price changes.

You must maintain sufficient funds in your account. If you don’t maintain adequate margins, this will lead to a shortfall and margin penalty, and your positions may be squared off.

How the additional ELM is calculated

Here’s how the calculation works:

Example scenario

You’re shorting Nifty 24000 CE, which is expiring today

Since it’s the expiry day, a 2% ELM is charged for this short position

Additional margin (per lot) = 2% × Underlying price × Lot size

Assuming Nifty is at 23,500, the calculation will be: = (2 ÷ 100) × 23,500 × 65 = ₹30,550

An additional ₹30,550 per lot will be blocked in your account for this particular contract as part of the margin requirement.

You can check updated margin requirements through:

Order window: Check the estimated margin requirement in the order window before placing your trade.

iRage’s margin calculator: Use the margin calculator to calculate total margin requirements, including the additional 2% ELM for expiry day trades.