A new order I placed was rejected due to insufficient margins and I noticed that the system has blocked additional margins for an existing long option position. Why does this happen?

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he rejection of a new order due to insufficient margin while holding a long options position may be because your existing long position has transitioned into an In The Money (ITM) option. According to our physical settlement policy, all ITM positions must have adequate margins in the last week of expiry.

The Exchange imposes physical delivery margins as a percentage of applicable margins (VaR + ELM ) of the underlying stock. This is levied from expiry minus 4 days for long ITM options as follows:

E-4 Day (Friday BOD) : 10% of VaR + ELM

E-3 Day (Monday BOD) : 25% of VaR + ELM

E-2 Day (Tuesday BOD) : 45% of VaR + ELM

E-1 Day (Wednesday BOD): 70% of VaR + ELM

E-0 Day (Thursday BOD) : 100% of VaR + ELM

Margins can also vary on an intraday basis depending on the option status of ITM or OTM.

Important notes: During volatile stock movements, the change in moneyness may be quick, leading to order rejections or acceptances. Ensure you maintain sufficient margin for successful order placement.