Margin is mandatory to collect from the client against the exposure which client is going to take in the market. In case client fails to maintain adequate margins, a margin shortfall occurs. The margin shortfall is the difference between the required margin and the available collateral.
Your F&O order gets rejected if you do not have the required margin. The system calculates the margin as explained below:
For buying options (Long): the margin needed = premium amount + any other delivery margin charged before physical settlement.
For short options (Write) & for Futures contracts: the margin needed = Initial Margin + Exposure + Delivery margin charged during physical settlement + any additional margin charged by exchange. Besides, the order may also get rejected due to Risk Management checks such as thin liquidity contracts. Such contracts are blocked for trade, for client’s safety purpose.
If the segment is not enabled to the client or it is restricted for fresh or any trade, one would not be able to trade in BSE.