Changes in margin requirements from 1st Sep, 2020

Trading Announcements
44

Under the new margin requirements, a minimum of 20% is required to buy a stock and to sell a stock. The margin for selling a stock is exempt if the broker can make an early payin to the exchange - which is debit shares from client demat and give to exchange/clearing corp on same day.

In case of BTST, the shares are still not credited to your demat, which means we can’t make an early payin. Which means we need to collect 20% for that sell transaction. When buying a stock we would have collected 100% money from you, so when you do BTST sell we have to block 20%. Which means 20% for buying and 20% for selling. Hence 40% gets blocked and 60% is allowed for F&O.

Why 60% for F&O and 100% for buying equity stocks?

That is because when buying equity for delivery the minimum required is 20%, we will still have 60%. So we’d be compliant to the new rules.

I know, you might still be confused. :slight_smile: But I guess you get the gist of it.

2 Likes
45

hi nithin i have questions example i have 1 lakh shares of reliance now i need to sell the reliance shares of worth 1lakh so i need to put 20% cash that is 20,000 to execute the sell trade so my doubt is my value is now 1,20,000 ? when i get that 20,000 rs i paid for sell 1,00,000 rs shares

please reply please please am in confusion @nithin

46

Very peculiar query.

  1. I purchase 100 shares of Reliance at 2100 on 1 sep.
  2. I sell them at 2080 on 2nd september.
  3. Same day price starts going up and i purchase back at 2120 on 2nd .
    Earlier it was considered 100*20=2000 intraday loss and back in holdings was avg price as 2100.
    will this be same ??
47

@nithin what about profit earned thru BTST can they be used to buy other stocks on T+1 day?

48

Hmm… did you read the post?

I have clearly told that you don’t need a margin to sell your shares right?

49

Yeah, that logic will remain the same. Intraday trades will not affect your holding prices.

50

Yes, the entire sell value of the credit can be used to buy more stocks.

1 Like
51

My balance is showing the amount but when im placing the trade its indicating insufficient fund

52

I am guessing you are referring to balance on Console. Like I have mentioned in the original post, the console balance includes intraday profits from yesterday which is not added to Kite balance today.

53

Hi

I have sold my Liquid bees today. and tried to place order in COIN to buy Mutual fund units.

But Order got rejected due to insufficient funds.

Kindly advice.

54

You can’t purchase mutual funds on the same day. You can place a purchase order tomorrow.

55

@nithin gr8!! thanks :slight_smile:

56
1 Like
57

With the new SEBI rule can I sell shares worth more than 1 core without POA. Is there a limit of 2 lac and selling limit of 1 crore from now with the new rule.

58

Good in zerodha, when will u allow to pledge all approved securities to pledge as per list in exchange
https://www.bseindia.com/downloads1/List_collateral.zip

59

Hi Nitin

I saw that the leverages on cover orders today were the same as given earlier for equity trades. Am I right in understanding that the leverage would be reduced from Dec 1, 2020?

60

Today’s rule has nothing to do with this, unrelated things. There is a limit of Rs 1crore if you are selling without a POA.

What 2lk?

61

Yes, you are right.

62

Hi Nithin,

Will there be any penalty if I trade in intraday (mis) with 5x or 10x?

Thanks
Manoj

63

No. Those restrictions are from Dec 1st 2020. We will reduce the intraday leverages accordingly to what is maximum allowed so you don’t have to worry about penalty.