• Dipen Sheth
• 19 Nov 2024
• Knowledge Centre

HDFC securities, Head - Equity & Strategic Marketing

In alignment with the recent NSE circular, there are key updates regarding Extreme Loss Margins (ELM) in the Equity Derivatives segment. These changes are aimed at enhancing risk management during options contract expiry days.

 Here’s what you need to know:

• On the day of options contracts expiry, to increase the tail risk coverage, an additional Extreme Loss Margin (ELM) of 2% shall be levied on short index options contracts.

 

• The additional ELM of 2% would be applicable for all open short index options at the start of the day, as well on short index options contracts initiated during the day that are due for expiry on that day.

 

• Kindly ensure necessary margins in the form of Funds / Margin Pledge for higher margin obligations on the open position(s) on account of the above changes to avoid square off of positions for margin shortfall.

The changes will be applicable from November 21, 2024