Do we require margin to sell from holding?

Zerodha
1

I was going through a post and found following

Margin required to sell your stock holdings

VaR+ELM requirement is applicable even when you place a sell trade of your holdings on the exchange. If you hold Rs 1 lakh of Reliance in your demat, a margin requirement of Rs 22,000 is required to sell it. While this might seem weird, the reason for this is that Exchanges and Depositories (demat accounts where you hold stock) are different systems. When you place a sell order on the exchange, there is no way for the exchange to know if you actually hold the stock in your demat account or not. So exchanges will require an upfront margin even for the sell trade.

But thankfully, there is a way around this by using what is called Early Payin (EPI). So instead of waiting for 2 days, if the broker can debit the Rs 1 lakh of Reliance from your demat and give it to the exchange by the end of the same day you sold the shares, a broker can allow you to sell without asking for any upfront margin. At Zerodha, we currently debit the shares and give it to exchanges on T+1 day (it is still Early payin as we don’t wait for T+2). We are working on having our systems ready to do Early Payin on T day so that you don’t have to have the margin in your account to sell your stocks from Aug 1st 2020.

I am little confused - do we require margin/funds (at Zerodha) before we can sell shares from demat holding? @ShubhS9 if yes how much %margin required to sell for TCS ?

2

No, you don’t need margins to sell stocks from your holdings, you can sell even if you have 0 funds.

However, due to SEBI’s new peak margin norms, when you sell shares from your holdings, only 80% of the proceeds will be credited to your account, remaining 20% will will be blocked for the day and will be available from the next day.

Would suggest you read this post for more information:

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