What happens on expiry or square off of any one of the contracts forming the spread position?
In case one position is squared off, the spread benefit will cease to exist and full margin needs to be made available to sustain the second position. However the system will not allow square off of one leg of a spread position if sufficient total margin for the second position is not available. On expiry of one of the contracts, the spread benefit will cease to exist and total margin required for the second position has to be made available. In case there is a margin shortfall, a margin call will be made to the customer. In case the margin is not provided for, the position can be squared off.
Related Questions
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- What happens on expiry or square off of any one of the contracts forming the spread position?
