Long-dated contracts margin requirements

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

Long-dated F&O contracts (far month, next quarter, or longer-dated) typically have higher margin requirements than near-month contracts. The additional margin reflects the greater time-related uncertainty and the wider range of possible outcomes over the longer life of the contract.

Why long-dated needs more margin

For longer-dated contracts:

Wider price range over the contract life.
More implied volatility uncertainty.
More time decay for option sellers (a feature, not a margin issue).
More liquidity premium / discount risk.

SPAN’s scenario calculations factor in time-to-expiry; longer-dated contracts have larger worst-case loss in some scenarios.

Market orders blocked for long-dated options

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

Zerodha Kite blocks market orders for long-dated (far-month, far-quarter) options to protect retail clients from substantial slippage on illiquid contracts.

Why blocked

Long-dated options typically have:

Thin liquidity (low volume).
Wide bid-ask spreads (5-15% or more).
Limited order book depth.

A market order would execute at the next available price, which can be far from the displayed LTP.

What “long-dated” means here

For NSE F&O:

Near-month (current expiry): usually market orders allowed.
Next-month (one month out): market orders allowed.
Far-month (3+ months out): market orders blocked.
Quarterly long-dated (6+ months): blocked.

The exact cutoff varies by contract and Kite’s risk framework.

Long-Dated on WebNotes

Long-dated contracts margin requirements

Why long-dated needs more margin

Market orders blocked for long-dated options

Why blocked

What “long-dated” means here