Why ELM margin applicable for expiry contracts?

As per exchange regulations, A 2% Extreme Loss Margin (ELM) will be applied to the expiry contracts to address potential volatility risks.

Example: (Calculation: Strike Price × Lot Size × 2%)

For a short position in a Nifty 25,000 call option with a margin of Rs.1 lakh, an additional margin of Rs.37,500 will be required on the expiry day.