Future Question about how loss is calculated on daily basis.

Background: I have been investing in stock market for around a couple of years, mostly in Equity. After doing some research & learning about F&O (mostly Futures), I bought my first lot of Futures for Feb month a few days back. I have some questions about that if someone can help.

  • 1st day, I bought the lot of 400 shares for 1500 each (actual value is very near to this but keeping it rounded off for easier calculations.

  • 2nd day stock lost 20 rs, and I lost 8000 rs in result. Zerodha asked me to add more funds to cover the losses, though I do not want to exit my position.

  • 3rd day, same thing happened. Stock was at 1460 & I lost 8000 rs so I added more funds to Zerodha account. But, My average in positions, still shows up as 1500 not as 1460.

Now my question is will these amounts (8000+8000 & further losses or profits) be taken into consideration when I exit my position or exercise my right to buy those shares on Feb expiry day?

Scenario 1: Lets say, Stock sinks to 1400 in next few days and I will be down 40000 rs which I have been adding to my account on daily basis due to loss. Now, I decide to exit my position at 1400 and book the loss. At this point my loss would be 40000 (simple math 400*100) or 80000rs(Because I have already paid 40000 and my position still shows up as 40000 ?

Scenario 2: I keep the lot with me till expiry date and buy shares at 1400 per share. Again same thing, will the loss be of 40000 capital which I’ve already added OR more than that?

I hope I have made my situation clear but if it is not, I can try to explain more. Any help will be greatly appreciated. Thank you!

Futures are marked-to-market, what this means is, any profit or loss you make on the position that day is credited to/debited from your account.

Your overall P&L once you exit your position will remain the same.

Your total loss will be Rs. 40000 only (400 * 100), not Rs. 80000. You can learn more about how the mark-to-market settlement works here:

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