Now SEBI is going to levy Additional Surveillance Margin in addition to Span and exposure margin. They want to squeeze out retail option “sellers” even before they have come up with product suitability.
Market will die everyone. You guys will have to leave the market I guess and do something else with your life.
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WTF !!
More margins!!
Admin deleted my post when I shared it. What to do? I have to share my number with everyone because I guess that might be allowed. I’ll create a post telling everyone the same that they need to join ARTI. Otherwise rules like this will keep coming and yes more rules will come becuase they are saying this is their plan under risk management.
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Uhmm this is how they make the life of a retail trader more difficult day by day. 5% is not a small amount. Esp when the existing margin requirements is already big enough.
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Yes your calculations seems to be correct. But that document also states on point 5 that the clearing members can charge more if they feel like it
“Members may further note that Clearing Corporation shall monitor the open
interest in derivatives based on sectoral indices (particularly where top 3 stocks
collectively constitute more than 50% of the weightage in the index), and, if
required, may impose higher margins as may be deemed necessary”
Meaning instead of 5% they can also charge 8% or 10% if they “deem” it necessary !!
As per my understanding, Increment will be on total future contract (please correct me if I am wrong) …
for an ex:
Reliance current lot value ~ 1.6L ( 95k for SPAN + 65 k for exposure margin )
For Reliance current exposure margin is at 5 %
After Nov 30 : Additional Surveillance margin of 5%; , extra 65 k
So a lot value will be around 2.25 lac
SEBI is acting smart as this will directly result in approx 30 % less liquidity in market
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That is huge and unbearable for many.
Yes this seems to be right, this will be horrible
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Even your broker can cancel leverage or increase / decrease leverage anytime they want. Just re-read the agreement signed with brokers. What is the big deal about 5% increase in margin. My broker requires around 15% extra margin regularly than what is stipulated by NSE.
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What broker does that? I don’t get it. Why would your broker charge 15% extra margin? And more importantly why do you trade with such a broker if it does that?
Interactive Brokers actually have such requirements.
And IB is the biggest broker in the world.
This is not what daytrader’s want to hear. The last thing we want to do is, get out and start searching for a job.
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Its such a setback, in the name of saving retail investors these guys are making the winners go out and want everyone to just buy and waste money in options or intraday. .already they stopped giving discount of premium money. .where does that money of premium go of lakhs of option sellers?? Sebi uses it as a free deposit to earn…and now this 5 percent extra margin …horrible
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With the increase in margins… we may see an increase in premiums I am guessing… so may not reduce profits of option sellers as such I am guessing…
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@nithin Is this ASM calculated on the gross total position of the contract? In that case the margin increase would be huge!
Yes its on total value approx 6 lakh increase for 11700 nifty 1000 bought.
bhai ho kya raha hai koi simple words me samjhayega…
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Can someone explain the reason or logic as to why this margin is being increased.
Regulator is passing on the cost of surveillance of stock exchanges.