Yes, margin will get recalculated once the first leg of cover order is executed. This margin would be compared with the margin blocked at the time of order placement and excess margin would be released or short margin would be blocked. Margin is computed using the below formula –

Derivative Cover Buy order: Quantity * [(Avg Trade Price * Margin %) + ( Avg Trade Price – Limit price of Cover Sell Order)]

Derivative Cover Sell order: Quantity * [(Avg Trade Price * Margin %) + (Limit Price of Cover Buy Order – Avg Trade Price)]

For e.g. In above case, if first leg order gets executed at an average trade price of 8400, then margin will be calculated as:-

Derivative Cover Buy order margin = 100 *[(8400 * 1%) + (8400 - 8300)] = 18400