I placed my trades after checking margin requirements and they were successfully executed.
Infact I have excess margin.
However once I place stop loss for open positions, my funds go in negative.
I’m also getting margin call email.
Why is this happening? Will it affect peak margin requirement ? Will penalty be involved?
Likely you are breaking hedge, I can give you exact reason if you can let me know your iD.
No, still the order is pending it is okay but if your hedge leg is traded and if you are left with unhedge position and negative margin you may end up paying penalty, so try exiting short leg/ unhedge leg first and then long options or hedge legs, or you can exit all legs at same time by using baskets. Can check this for more.
My ID is DV0962
When I exit my positions, at eod, I will first cancel pending orders, I will always exit sell first and then buy.
But as things stand for now, could u kindly check and let me know if penalty will be involved.
My ID is DV0962
No, as I mentioned pending orders are okay and not eligible for penalty.
@siva Lets say sometime, long leg executed first and within a minute the short leg.
Will be charged with penalty?
Maybe, as for peak margins exchange takes 4 random screenshots during the day, so if that screenshot is taken during that 1 minute penalty will be levied.
@siva @ShubhS9
Is the below position required extra margin? 50% rule?
HcL tech one long and short option
Hi @siva, Can you elaborate on this a bit more? I have seen this happen to me but my position sizing rule always leaves enough margin in the account to not go into the negative. So never bothered to ask.
Thanks
It does as we never know one leg can expire ITM and other may not. I assumed you are asking for physical settlement as we charge double margins on wednesday and thursday.
But the long leg is near strike price and short leg is OTM.
So now, if i hold this position for tomorrow . do i need to keep 50% margin?
What you mean by 50% margin?
I mean you charge some extra margin of contract value on wed/thus right?
Or simple words just tell me can i hold the above position for tom. considering i have no extra cash/margin.
You can check your available margin and used margin columns on funds page for that because we block all the increased margins from wednesday morning itself.
For ex consider below positions.
To buy fut and put it requires only 51k, but to go long on nifty fut you need 1.6 lakhs, so few users after taking this initial hedge position with 51k they close long put which is a hedge leg and immediately margin will increase to 1.6 lakhs, if someone don’t have that much it will go to negative balance.
This I understand, could you may be translate this into the context of option writing?
Let say I have opened a new short strangle. Now instead of hedging these, I am putting a stoploss on both legs and these orders are ‘pending’. Why do I need more margin for this albeit a small amount?
I hope the question is clear.
