FnO margins from dec 1

F&O
1

I know that from dec 1 its 25 percent for stocks and then gradual increase to 100 percent by sep 1 2021. the thing i want to ask is it the same for fno also.like nrml margin for nifty is almost 1.5 lakh . so from dec1 2020 ,will i have to give 25 percent of 1.5 lakh or the whole 1.5 lakh?? because from past few months i thought i have to give 25 percent only from dec 1. but i was reading the margin post again by nithin kamath. and it says that for fno i have to give full span+exposure (nrml) and not just 25 percent?? pls clear.thanks in advance.

2

Margins are going to increase in phased manner from December 1st, not straightaway.

As explained in this post.

This SEBI circular says that there will be a penalty if trades are allowed without sufficient VAR+ELM or 20% for stocks, and SPAN+Exposure from Dec 1st 2020 even on an intraday basis.

  • Dec 2020 to Feb 2021 - penalty if margin blocked is less than 25% of VAR+ELM ( or 20% of trade value) for stocks or SPAN+Exposure for F&O. (Max leverage of 5% or 20 times for stocks)
  • Marc 2021 to May 2021 - penalty if margin blocked less than 50% of minimum margin required. (Max leverage of 10% or 10 times for stocks)
  • June 2021 to Aug 2021 - penalty if margin blocked less than 75% of minimum margin required. (Max leverage of 15% or around 7 times for stocks)
  • From Sept 2021 - penalty if margin blocked less than 100% of minimum margin required. (Max leverage of 20% or 5 times).

The above essentially means that in a phased manner the broking industry will move to a structure where intraday leverages offered can’t exceed what is already offered by VAR+ELM (or 20%) for stocks and SPAN+Exposure for F&O by Sep 2021.

You won’t need full SPAN + Exposure from December 1st, you will need 25% of SPAN + Exposure from December to February, from March to May you will need 50%, from June to August you will need 75% and from September 2021, you will need full SPAN + Exposure margin.

1 Like
3

ok thanks

4

@ShubhS9 i guess the hedged margin remains same right ?

5

You will continue getting margin benefit for hedged positions as you are currently getting, there are no changes to that.