MCX additional margins as a cost of carry

Sat, 20 Jun 2026 00:00:00 +0000

MCX additional margins are the extreme loss margin, additional or ad-hoc margin, tender-period and delivery-period margins, and pre-expiry margin that the Multi Commodity Exchange and its clearing corporation levy on a commodity futures position over and above the SPAN initial margin. They are blocked capital, not a charge: the money is returned when the position is closed or settled. What they cost the trader is the use of that capital for the days it stays locked, a cost of carry rather than a fee on the contract note.

Higher margin near expiry

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

F&O positions face higher margin in the days leading to expiry, particularly for stock F&O contracts which require physical settlement. This layered margin increase reflects the rising settlement risk as expiry approaches.

For index F&O (cash-settled)

Index futures and options (Nifty, BankNifty, FinNifty, MidcapNifty, Sensex) cash-settle at expiry. The margin increase is modest:

Slightly higher SPAN due to time-decay scenarios.
Possible additional margin layer 1-2 days before expiry.
Reverts to normal once new contracts list.

For most index F&O traders, the near-expiry margin increase is manageable.

Pre-Expiry Margin on WebNotes

MCX additional margins as a cost of carry

Higher margin near expiry

For index F&O (cash-settled)