Description
NSE increases minimum initial margin and short option minimum margin for silver contracts to 10% as risk containment measure.
Summary
NSE Clearing Limited has revised the Minimum Initial Margin (IM) and Short Option Minimum Margin (SOMM) for silver contracts across all variants to 10% as a risk containment measure, effective August 5, 2025.
Key Points
- Minimum Initial Margin increased to 10% for all silver contract variants
- Short Option Minimum Margin (SOMM) set at 10%
- Minimum Margin Period of Risk (MPOR) set to 3 days
- Minimum Volatility Scaling Rate (VSR) set to 6%
- Applies to all silver contract variants
Regulatory Changes
- Modification of previous circular 0217/2025 dated July 23, 2025
- New margin requirements implemented as risk containment measure
- Minimum IM percentage will not be scaled up by MPOR
- For options on goods, MPOR must be at least 3 days or MPOR of corresponding futures contracts, whichever is higher
Compliance Requirements
- All members must comply with new margin requirements
- Updated margin calculations must be implemented for silver trading
- Risk management systems need adjustment for new parameters
Important Dates
- Effective Date: August 5, 2025
- Circular Date: August 4, 2025
Impact Assessment
The margin increase to 10% will raise the cost of trading silver contracts, requiring traders to maintain higher collateral. This risk containment measure aims to reduce potential losses but may impact trading volumes in silver derivatives. The uniform application across all silver variants ensures consistent risk management across the commodity segment.
Impact Justification
Margin increase affects silver trading costs but is focused risk management measure