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NIFTY iron condor margin

An iron condor sells an out-of-the-money call and an out-of-the-money put, then buys a call and a put further out as protection. The bought options are called wings. They cap the loss on either side, which is why the exchange margins the condor far below the same short options held alone.

Open in calculator All margins

Margin for this trade

Margin data as of (NSE file)

Expiry

  • Iron condor (sold 4 strikes out, bought 8 out) NSE F&O file of 30 Oct 2026
    • Sell NIFTY 23,250 CE, 1 lot (65 units)
    • Buy NIFTY 23,450 CE, 1 lot (65 units)
    • Sell NIFTY 22,850 PE, 1 lot (65 units)
    • Buy NIFTY 22,650 PE, 1 lot (65 units)
    SPAN
    ₹8,682
    Exposure
    ₹59,938
    Option value
    ₹3,679
    Premium
    ₹2,028
    Stocks, minimums and 5% buffer
    ₹3,615
    Total
    ₹77,942
  • Short strangle (same sold options, no wings) NSE F&O file of 30 Oct 2026
    • Sell NIFTY 23,250 CE, 1 lot (65 units)
    • Sell NIFTY 22,850 PE, 1 lot (65 units)
    SPAN
    ₹1,18,948
    Exposure
    ₹59,938
    Option value
    ₹5,707
    Premium
    ₹0
    Stocks, minimums and 5% buffer
    ₹9,230
    Total
    ₹1,93,823

≈ approximate Per basket, at the exchange’s reference prices, on the nearest expiry all legs share. Option value is the value of sold options less the credit for bought ones. The 5% buffer rounds the estimate up.

Margined one by one, these legs would need ₹3,26,042: together they need ₹2,48,100 less.

That is ₹1,15,881 less than short strangle (same sold options, no wings).

Worked out from the margin files NSE, BSE and MCX publish each day (SPAN, VaR and exposure rates), then rounded up by 5% to stay on the safe side. Your broker can ask for more: ad hoc or delivery margins, its own intraday leverage, or a higher figure during peak-margin checks. Use it to plan a trade, and check the order window before you place it.

How this margin works

The margin is mostly SPAN: the clearing corporation checks the whole position against 16 price and volatility scenarios and charges the worst loss. With wings, the worst loss is limited to the distance between the sold and bought strikes, less what the options are worth. Exposure margin (ELM) applies only to the sold options. You also pay the premium of the wings in full when you buy them.

The table uses the nearest expiry, with the sold strikes four listed strikes from the money and the wings eight out. Change the strikes in the calculator to see how wider wings raise the margin and narrower wings lower it. On expiry day, short options also attract an extra exposure margin under SEBI’s 2024 rules, so a condor held into expiry needs more.

The figures follow the calculator’s method: SPAN and exposure from the clearing corporation’s files, option value and premium, and a 5% buffer.

NIFTY iron condor questions

Why does an iron condor need less margin than a short strangle?

Because the bought wings cap the loss. SPAN margins the worst loss of the whole position over the exchange’s scenarios, and with wings that loss cannot exceed the gap between the sold and bought strikes. A short strangle has no cap, so its worst-case loss, and its margin, is much larger.

Is the premium of the wings part of the margin?

You pay it in full when you buy the wings, so brokers block it with the margin. The calculator shows it as a separate premium line. The premium you receive for the sold options is not counted as margin relief.

Do I get the lower margin if I place the legs one by one?

Margin is checked on the position you hold. If you sell first, the full short-option margin is blocked until the wings are in. Buying the wings first, or placing the legs together as a basket, avoids that.

Sources

Figures updated . Method and text reviewed by the Cirrus team on .

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