Required margin vs final margin on a Kite basket

On a Kite basket order , the required margin is the money Zerodha needs to place every leg of the basket, computed leg by leg before any offset, and the final margin is the smaller amount actually blocked in the account once the basket executes and the hedge benefit between offsetting legs and any written-option premium credit settle. The two figures appear side by side on the basket summary, and the gap between them is not an error or an extra charge: the final margin is the slice of the required margin that stays blocked after the net position is computed.

This distinction trips up traders the first time they build a hedged options basket. The required figure can look alarming, several times the capital the strategy actually consumes, because Kite has to confirm you can fund each leg at the moment it is sent to the exchange. The final figure is the real economic cost of carrying the position. This article explains how Kite derives each number, why a hedged basket blocks far less than the sum of its legs, how the SPAN margin framework produces the benefit, why the order of legs changes the required figure but never the final one, and the Include existing positions toggle that can drive the required figure to zero.

Conflict-of-interest disclosure. This guide is published by the WebNotes Editorial Team for informational purposes and is written independently. WebNotes operates a Zerodha account-opening referral programme, disclosed on the pages that carry the referral link; this guide does not carry it and earns no referral commission from the procedure described here.

What the two figures mean

Kite’s basket summary shows two margin lines. Zerodha’s own basket documentation defines them plainly. The required margin “refers to the funds you need to place your basket order initially.” The final margin “refers to the actual funds that get blocked in your Zerodha account after your basket order executes.” The support note adds the point that catches people out: the final margin is “not an additional margin you need to add.” It is what remains blocked out of the required amount once the order goes through.

The required margin is a placement check. The exchange’s risk system, and Zerodha’s risk management system layered on top, must be satisfied that each leg can be funded as it hits the matching engine. So Kite walks the basket leg by leg and asks, at each step, how much margin the next order needs given what is already in place. The sum of those leg-level checks is the required margin.

The final margin is a position check. Once all the legs are filled, the exchange holds a single net portfolio of futures and options, and it margins that portfolio as a whole under SPAN plus exposure. A long option sitting against a short option is far less risky than either leg alone, so the portfolio SPAN is much smaller than the legs added up. The premium you receive for writing an option is credited to the ledger and offsets the requirement further. What is left after both effects is the final margin.

A worked example from Zerodha

Zerodha’s basket support article works a concrete Nifty options spread: buy the 24350 call, sell the 24500 call. Placed inside a basket, the figures are these. The required margin to initiate the order is Rs 50,343.68. The final margin blocked after execution is Rs 38,913.68. The same two legs placed as standalone orders, with no basket and no hedge recognition at placement, would demand Rs 2,31,766.42. The short 24500 call earns a premium of about Rs 11,430, which the system applies against the requirement, and that credit is the bulk of the drop from the Rs 50,343.68 required figure to the Rs 38,913.68 final figure.

The numbers tell the whole story. The hedge benefit between the long and short call collapses Rs 2,31,766.42 of naked requirement to Rs 50,343.68 once both legs are recognised as a spread. The premium credit then trims the blocked amount to Rs 38,913.68. A trader who looked only at the standalone margin would conclude the spread needs Rs 2.32 lakh of free capital. It needs Rs 50,343.68 to place and ties up Rs 38,913.68 to carry.

Source: Zerodha basket support, required-versus-final margin worked example. Figures are illustrative of a specific Nifty strike pair and move with spot, volatility, and the exchange’s SPAN parameters.

How the hedge benefit arises under SPAN

The benefit is a property of the SPAN margin system the exchanges use for futures and options. SPAN does not margin each contract in isolation. It builds a worst-case loss scenario for the whole portfolio across a grid of price and volatility moves, then charges margin equal to that worst-case loss. A long call and a short call at a higher strike form a spread whose loss is capped at the difference in strikes minus the net premium. Because the maximum loss is bounded and small relative to either naked leg, the SPAN charge on the pair is a fraction of the SPAN on either leg standing alone.

That is why the basket required margin of Rs 50,343.68 is roughly a fifth of the Rs 2,31,766.42 the legs demand separately. The exchange sees a defined-risk spread, not two independent option positions. The exposure margin, the second SPAN component, is charged on the gross notional and is smaller. Together they form the portfolio margin that, after the premium credit, becomes the final blocked figure.

For a deeper treatment of how SPAN and exposure combine, and how written-option premium enters the ledger, see the SPAN margin on Zerodha reference. The basket simply surfaces the result of that calculation at two stages: placement, where it sums leg-level checks, and post-execution, where it holds the net portfolio margin.

Why leg order changes the required figure

Zerodha’s documentation states that “the required margin will differ based on the sequence of individual orders, while the final margin remains the same.” For an F&O basket, “it is always better to place the buy option orders first so that the required margin is lower.”

The reason follows from the leg-by-leg placement check. If the basket sends the short call first, that leg is checked as a naked short option, which carries the full SPAN plus exposure for an uncovered written option, a large number. Only when the long call arrives afterward does the hedge appear. If instead the buy call is sent first, it is a small debit, and the short call that follows is immediately recognised as the second leg of a spread, so its placement check is the hedged figure. Same two legs, same final position, but the running required margin peaks lower when the protective long leg leads.

You can reorder legs directly in the basket. Hover over an order to delete, duplicate, or edit it, and drag and drop to change the sequence. Putting the long options at the top of an F&O basket is the standard way to show the lowest required margin. Zerodha notes the sequence makes no difference for an equity basket, or when you hold margin comfortably in excess of every leg’s standalone need.

The Include existing positions toggle

The basket analysis carries an Include existing positions option. Ticking it tells Kite to net the basket against open positions that are not part of the basket, so you can see the requirement in the context of your live book. This is useful when a new basket adds a leg that hedges something you already hold.

The caveat Zerodha flags is real and worth stating. With Include existing positions on, the basket “may display a required margin of 0 even when you need margin to place the order.” That happens when a basket leg reduces the overall portfolio margin while still needing margin to be placed at the exchange. The net portfolio figure can read zero or negative even though the placement check is not zero. If the zero confuses you, disable the option and read the basket’s standalone requirement instead.

Equity baskets behave differently

The required-versus-final split is mostly an F&O phenomenon. An equity basket carries no SPAN hedge benefit and no option premium credit. A CNC delivery leg needs the full cash value, and an MIS intraday leg needs the intraday margin, leg by leg, and that is also what stays blocked. There is no offsetting between a buy of one stock and a sell of another for margin purposes, so the required and final figures track each other. Zerodha’s note that “this sequence of orders will make no difference when trading shares” is the same point: with no spread to recognise, leg order is irrelevant and the two margin lines converge.

This is why the distinction matters most for option-spread traders running multi-leg baskets . A four-leg iron condor, a bull call spread, or a calendar spread all show a required margin well above the final blocked margin, and reading only the required figure overstates the capital the strategy consumes.

Reading the two figures correctly

Treat the required margin as the gate and the final margin as the cost. You must have the required margin free to place the basket; the order will be rejected for insufficient margin if you do not, even though the position will eventually tie up less. Once placed, the final margin is the capital actually committed, and it is the number to use when sizing the position against the account and computing return on margin.

The gap is not money lost or held in limbo. It is the difference between the conservative placement check, which funds each leg as if the hedge were not yet there, and the portfolio margin, which recognises the hedge in full. A trader who arranges buy options first, funds to the required figure, and judges the trade on the final figure is reading the basket the way the system intends.

See also

• Basket order on Kite
• How to place a basket order on Kite
• How to place a multi-leg options basket on Kite
• Share baskets on Kite
• Quick baskets on Kite web
• Why the Analyze option does not load on a Kite basket
• How to fix a basket that partially executed
• Import a file to create a basket of trades on Kite
• SPAN margin on Zerodha
• Margin trading facility
• CNC product code
• MIS product code
• NRML product code
• Limit order on Kite
• Market order on Kite
• SL order on Kite
• SL-M order on Kite
• Bull call spread
• Trigger price versus limit price
• Order validity types
• How to fix an RMS rejection on Zerodha
• Why orders are rejected on Kite
• Kite Connect basket orders API
• Kite by Zerodha
• Kite web
• Nifty 50
• Zerodha

External references

• Zerodha support: What is the required and the final margin in a basket order?
• Zerodha support: How to place basket orders on Kite?
• Zerodha support: What does the margin required amount on the Kite order window mean?
• Kite Connect: margin calculation documentation
• NSE: SPAN margining framework

References

1. Zerodha support, What is the required and the final margin in a basket order? (worked Nifty 24350 CE / 24500 CE example; required Rs 50,343.68, final Rs 38,913.68, separate Rs 2,31,766.42; as of 21 June 2026).
2. Zerodha support, How to place basket orders on Kite? (order sequence, Include existing positions, up to 20 orders per basket and 50 baskets; as of 21 June 2026).
3. NSE and exchange SPAN (Standard Portfolio Analysis of Risk) margining framework for futures and options portfolios.
4. SEBI circulars on margin collection and reporting in the cash and derivatives segments.