Can i use my cash component fund whenever i have futures contract MTM shortfall of margin? (E.g-; i took nifty futures position from the existing funds and then, . i pledged the fund that wasn’t used in that position and after that for first day at EOD MTM was settled by some funds i had but on day 2/3 when my pledged amount came in can it be use for EOD MTM margin considering the fact that the price went against me even on day 2/3?)
The collateral margin you receive from pledging cannot be used for settling losses, even if it’s considered cash equivalent. For settling losses and charges, you will need cash in your account.
If you don’t have enough cash in your account, this will result in your account going in debit balance, on which interest is applicable at 0.05% per day.
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What about PEAK margin penalty (or whatever its particular name is) ; impose by exchanges after i took entry. (suppose the volatility increases massively and there was no MTM loss settlement margin issue but the initial margin requirement issue imposed by the exchanges ) could that margin penalty be paid off by my extra pledged funds? and as brokers are responsible before entry of client, this margin increase has happened after the client got into the trade so he is liable of the margin penalty, thus for that penalty can the client use the cash component pledged funds?
If the margin increases after you take the trade, in that scenario, the penalty is applicable on the broker, not the client. Explained in detail here: NSE Circular on Short margin penalty refund - #26 by nithin
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