Why does the margin required for an F&O trade change?

Margin requirements aren’t fixed once a position is open, they’re recalculated continuously based on the exchange’s risk assessment, which factors in the underlying asset’s current volatility, how close the market price is to your position’s breakeven point, and overall market conditions. If a stock or index becomes more volatile, whether due to upcoming results, a major news event, or just erratic price action, SPAN margin requirements typically increase to reflect the higher risk, even if you haven’t changed your position at all. Margin can also change around expiry, since exchanges often raise margin requirements on contracts close to expiry to account for the higher risk of sharp moves. You monitor your margin utilisation regularly, especially for overnight F&O positions, since a margin shortfall that isn’t addressed (by adding funds or reducing the position) can lead to a broker-initiated square-off, often at a price you wouldn’t have chosen yourself.