An extra margin is applied to energy futures and all other futures contracts as they approach expiry for safety reasons (Except Tradeable Index) . This precautionary measure is implemented by the exchange, initiating the margin increase five days prior to expiry. The escalation occurs in increments of 10%, 15%, 20%, and 25%. The rationale behind this is to mitigate the risk associated with physical settlement. Brokers must adhere to this margin adjustment to prevent any potential margin shortages and ensure a secure trading environment.
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