Available margin is getting reduced when my profits in open positions is increasing

General
1

I never observed keenly but I found something strange in the available balance. I have open positions in index derivatives. The M2M is increasing (profit increasing) but the available margin is reducing. This appears very illogical. Is there anyone who noticed or understood this?

2

Hey @lakshmihv

Unrealized profits are not considered as part of available margins but unrealized losses are considered in available margin.

This as per our RMS Policy cos unrealized profits can turn into losses at any point of the trading day.

3

Thanks. But I don’t understand the rationale behind if that is the policy.

4

This is inline with our RMS policy of being prudent.

Unrealized profit by nature is not guaranteed profits, it could possibly turn into losses. If unrealized profit were to be added to your available margin, it is as good allowing you to open a new position with money you don’t have.

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