Additional Margin on WebNotes

Additional margin for selling index options

Wed, 20 May 2026 00:00:00 +0000

Additional margin for selling index options refers to ad-hoc or framework-driven margin layers added on top of standard SPAN + Exposure when:

Volatility spikes elevate risk.
Specific events (RBI policy, elections, budget) trigger additional precaution.
SEBI / exchange determine a sector-wide need for extra margin.

This article covers when these apply and the impact on retail option sellers.

Standard vs additional margin

Standard for index option seller:

SPAN : ~8-12% of notional.
Exposure : ~3-5%.
Total: ~11-17%.

Additional margin (when applied):

Additional margins blocked for existing long options

Wed, 20 May 2026 00:00:00 +0000

Additional margins may be blocked for existing long option positions in certain scenarios, even though long options theoretically have premium-only risk:

Scenarios

Scenario	Why additional margin
Near-expiry physical settlement (stock options)	Pre-expiry margin layer
Volatility spike during session	SPAN parameter refresh
Risk-management policy by broker	Internal RMS rules
Specific contract restrictions	Exchange-imposed

For long positions specifically

Standard rule: A long option pays the premium upfront; no additional margin needed.

Exceptions: