About RMS and Its Role in Placing an Order?

Sir,Im new to the stock market… I have doubts regarding RMS… I list them by points.

  1. What is RMS?

  2. What is the role of RMS in placing an Order?

  3. Why orders gets rejected saying “RMS limit exceeds…Availabitity 0 etc”?

  4. How to set up RMS manually?

Hope you may clarify my douts…

Risk Management System (RMS) plays a very crucial role in order placement. There is no concept of setting up RMS manually. It will be set up by the system based on the funds available in your account.

When you see a msg indicating “RMS limit exceeds” it means you are trying to do a trade which requires a higher amount than what you already have in your account.

This is what I know Vignesh.

  • What is RMS? RMS is Risk Management System. These are set of guidelines laid down by the Risk Management Team to ensure that none of the trader defaults in payment or to ensure proper funds are available with the trader before and after he enters the trade. Also they see to that, if a trader is making huge losses, than what money he has in his account, they try to stop the losses and square off the trades (so that his account balance will not go in negative beyond a value). Also they set the prescribed limits of leverage a trader can get, by studying the market on day to day basis.
  • What is the role of RMS in placing an Order? Very simple. RMS checks whether you have sufficient balance in your account to do the trade. If the trade is leveraged, then it will check only for the margin amount which is the minimum amount after calculation required to open a new trade position.
  • Why orders gets rejected saying "RMS limit exceeds...Availabitity 0 etc"? If you dont have the sufficient balance or you are placing a trade out of exchange specified daily price ranges etc., you will get the RMS check error. In RMS error, it will give details like Amount Required XX,XXX but amount available is only this much YY,YYY.
  • How to set up RMS manually? You cannot set it manually, it is all  preset in the software. Only RMS team will decide if any change is to be made. If you get RMS error, read its description and see what it says. For example you are trying to 100 shares with 17000 rupees, RMS error says Amount required 17056 and amount available is 17000, just try to reduce the number of shares from 100 to 98 or something, now you order will get placed. To check exactly how many shares you can buy, use the calculator before placing an order. https://zerodha.com/margin-calculator/Equity/​ Also remember if you have some open pending orders which you dont want, cancel it before placing the order, otherwise that will also block some amount from your balance,
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Hello I have a query about rms on a day a bank nifty put option was trading @rs 48 and d next day it was trading @ 10 because there was a gap up opneng in bank nifty and I wanted to buy it I placed the order @rs 11 but it was rejected saying rms check circuit limit and if it was out out of circuit limit how were some traders were able to trade @ that price and below it is d ram rule is different for every on depending on funds can u old tell me and help me