In morning
All positions are in NIFTY weekly options for expiry 3 nov 2021
In morning I initiated following positions
BUY 1800 x 16900 PE
BUY 1800 x 18700 CE
SELL 1800 x 17800 PE
SELL 1800 x 17800 CE
and it did get executed and in funds tab it was showing
used margin : ~25 lakhs
available margin : ~5 lakhs
after I exited from short positions
and sent order to sell 1800 x 17700 PE and 1800 x 17700 CE
but only CE order gets executed
and PE order got rejected by saying that
Insufficient funds. Required margin is 3139730.05 but available margin is 3045856.60. Check the orderbook for open orders.
Can anyone please explain , why the hell margin got increased this much, and it not letting me take the positions ?
When you have net off positions your margin requirement will be less. But when you exit one leg, your margin requirement increases for the other leg. So when you want to close a PE position by buying it, the required margin to buy exceeds the margin available.
If you are trying to enter same trade (Same buy and sell strikes), usually you should be able to enter with same margin. There may be scenarios where margin can increase due to volatility or due to increase in Nifty spot price.
Ex. Margin for Nifty 18000 CE will be more when Nifty is at 17950 compared to margin for same strike when Nifty is at 17750.
Can you please help me in determining the margin requirement here?
or How much funds should I keep free in my account , so that I will be able to enter in case margin spikes
It changes everyday as it comes closer to expiry.
I have seen if I have short 1800 quantity of nifty options on Friday, just to continue with same positions on next Thursday I would have to bring them down to 1200. That’s how much margin changes. I usually close in parts to maintain 10 percent extra margin.
In simple terms, margin refers to the act of borrowing money from the brokers to buy securities. The trader is able to buy more securities than he can actually purchase through margin. The margin is the difference between a product or service’s selling price and the cost of production, or the ratio of profit to revenue. To buy on margin means to use the money borrowed from a broker to buy securities. You need to have a margin account with the broker, and it is different from the Demat account. A margin account is also known as a trading account.
There are an initial margin and maintenance margin required.
Initial margin is the margin which represents the purchase price that must be covered by the investor’s own money. Maintenance margin refers to the amount of equity that investor must maintain after the purchase has been made.
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Attached the screenshots for short straddle on BankNifty for Monday, Tuesday and Thursday. There doesn’t seem to be a huge difference in margin requirement.
Then may be it happens to me because I sell only Deep OTMs. Right now I am have short 120lots of banknifty on both call and put side. Let me post here tomorrow on the number of lots I am able to carry forward tomorrow.
Another reason I can think of is IV in banknifty contracts went up in the last 2 months. Thats when I was actually having problem. May be now that it is cooling down a bit, there isn’t much difference.
Yea. But it was much more when we got that spike in bank nifty from 39k to 41k. So may be because of increase in IVs. There was clearly 30 percent plus increase from Thursday to next Thursday.
zerodha always report less margin in funds tab, but don’t let me take more position by stating required margin error
From last few days what I am doing is
I check margin on opstra and other sites, then take position on zerodha accordingly
zerodha still show less margin in used tab, and show more funds in available margin
But this time I understands that margin requirement in rejection error is same as what other sites are reporting
There seems to be error in reporting margin in funds tab but zerodha’s RMS system is calculating correct margin and hence not letting me take more positions
This happened because I send orders almost at same time back to back
all orders must have reached at same time or when short orders reached to zerodha, long order might not have executed by then, hence margin required error
