Zerodha
Intraday
Volatility
Intraday margin increases on volatile days
Intraday margin requirements increase on high-volatility days as VAR (for equity) and SPAN (for F&O) parameters update to reflect the elevated risk. This can affect existing intraday positions even without new trades.
How it happens
The exchange’s VAR / SPAN parameter file refreshes:
- End of day (default).
- Mid-day during exceptional volatility.
- Multiple updates on extremely volatile days.
When parameters increase:
- VAR (equity intraday margin) rises.
- SPAN (F&O margin) rises.
- ELM may also adjust.
Open positions’ required margin scales up accordingly.
Effect on open positions
For a trader with existing intraday positions:
- Mid-day SPAN file update: Margin requirement increases.
- If your margin available is tight: Shortfall arises.
- Auto-square-off may trigger to resolve shortfall.
This can produce forced exits at unfavourable prices on volatile days.
Days when this happens
| Day type | Likelihood of mid-day margin update |
|---|---|
| Budget day | High |
| RBI policy day | Moderate to high |
| Election results | High |
| Major geopolitical events | High |
| Sustained market correction | Likely |
| Normal session | Low |
The exchange announces likely volatility days in advance via circulars.
How to prepare
For known-volatile days:
- Reduce position size in advance.
- Maintain extra margin buffer (50%+ above minimum).
- Monitor positions closely through the session.
- Avoid initiating new positions during the most volatile hours.
For unexpected volatility:
- React quickly to SMS / email shortfall alerts.
- Close positions or add funds via UPI / IMPS.
- Don’t wait for auto-square-off.
Example scenario
Pre-event volatility update (e.g., RBI policy day morning):
- Normal SPAN: Rs 1.3 lakh for a Nifty short call.
- Volatile-day SPAN (mid-day update): Rs 1.7 lakh.
- Difference: Rs 40K additional margin per position.
For a trader running 5 such positions: Rs 2 lakh additional margin requirement.
See also
- Additional margin for selling index options
- SPAN margin on Zerodha
- Exposure margin on Zerodha
- VAR + ELM intraday margin on Zerodha
- Intraday leverages for MIS / CO
- Margins and leverage at Zerodha
- Leverage against available funds
- Margin call timeline at Zerodha
- Margin shortfall and auto-square-off
- Margin shortfall penalty notice
- Auto square-off on Zerodha
- SEBI peak margin rules explained
- Upfront margin requirements post-2020
- 50:50 cash collateral rule explained
- Margin required on order window
- Margin available / used / cash on Kite funds
- Naked option selling margin on Zerodha
- Hedged positions margin benefit on Zerodha
- Zerodha margin calculator
- Pay-in funds explained
- Margin pledge (Zerodha)
- Kite Positions tab explained
- Futures and options
- Cover order (Zerodha)
- Bracket order (Zerodha)
- Cash component vs collateral component
- Free cash meaning on Zerodha
- SEBI 90% retail F&O traders lose money study
- Zerodha
- Kite (Zerodha)
External references
References
- NSE Clearing, VAR file refresh framework, nseclearing.com.
- SEBI, Intraday margin framework, sebi.gov.in.
- Zerodha, Volatile-day margin notifications, support.zerodha.com.