How much is the short margin penalty charged by NSE for derivative positions?

I tagged him because, I am not getting clear answer from anyone including shubh or you…and this happened again - margin statement shows negative …

You answered before - that 80% proceeds can be used to trade fno without worrying about penalty …so I relied on your info and took trades. …but I see negative margin balance.

Can you confirm that because of early pay in by Zerodha - 80% of proceeds from sold holding is added in available margin on same day and remaining 20% on next day ?

If yes I checked margin few recent margin statements but I did not find 80% proceeds added to margin on same day or 20% margin on next day …I think they are added only after T+2 days.

This creates a lot of confusion and stress.

I can assure you there is no penalty if you use 80% of sale proceeds from demat sale, no need to take stress.
Regarding margin statement @Nakul @VenuMadhav can give more clarity.

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Please raise a support ticket and we’ll have someone respond. Difficult to answer account specific queries.

I already raised the ticket but its not a surprise - its waste of time and energy.
I am asking a general question - its not account specific.

80% Proceeds from sold shares is added to available cash margin that you send at the end of the day(well it comes next day morning) ? Or funds from that sold holding is not reported for margin purpose to exchange until T+2 (when it becomes freely available to withdraw - i.e. unencumbered) @Nakul @VenuMadhav @siva

@curiousvi I was also in the same dilemma few months back. It seems that they do early payin to clients given the fact they debit the shares early from your demat and send it to exchange due to which exchange knows that you have that much worth of shares in your demat and penalty is not charged. It is a similar kind of procedure like you do for pledging of shares. Just the case here is zerodha sends it to exchanges on Tth day itself and marking exchanges that client should get that much margin since the shares are with you. Also you can’t withdraw that 80% amount until T+2 day which is the settlement. In pledge margin the same thing happens, you get the margin to trade fno but can’t withdraw that.

Thanks but my question little different …

I understand we can not withdraw but when they do early payin - 80% credit should be added to margin statement on the T day (same day) and 20% on T+1 day …if so our margin statement will have higher available cash margin in the daily margin statement which may avoid negative balance.

If they don’t than only on T+2 when actually proceeds become withdrawable than only they will add to available cash margin in daily margin statement?

Please refer to your link and check @Nakul said early payin does not work sometimes

Dude I mentioned to them but it seems not many clients are asking this due to which they left the task of showing the correct margin.
Their support ticket is just waste of time. I didn’t put much efforts since then but stopped equity transactions on zerodha altogether.
I have also cut down my fno trades to 50% since then. I would have shifted to other brokers but, keeping in mind the brokers could default I sticked to zerodha.

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Here are three conflicting articles on zerodha




First one says unless its fully realized on t+2 - you can not use margin from sold shares / 2nd link says you can use up it as collateral after haircut and 3rd link says you can use it after 20% deduction from sold value

My concern is if they don’t report correct available margin in the margin statement - clients are subject to margin penalty from exchange. @siva

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No clients are not penalized since they show correct margin to exchanges which means the report they give to clients has some outdated data but the clients funds and securities are correctly mentioned.
They seem to have some vague policy which they don’t want to let other clients know. I hope someday they would feel the importance of it.
Your question should have been that how the client would know if there is margin penalty if it is not a correct margin. Zerodha can anyday charge any penalty if the margin statement is not correct.

So you mean even if its margin statement shows negative balance INCORRECTLY - exchange will not charge penalty but zerodha will charge interest penalty if cash margin is less than 50%?

You can read my post. I have shown to them 9 lacs of marging negative which was due to the sold shares but I wasn’t charged any penalty. Their customer support people are dumb as bots. Bots even given some kind of satisfactory reply but if a person is just repeating what is written on the website then its just senseless to have them. I didn’t try to contact them after that incident.

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May be that post is different from what you mentioned but I had posted plethora of posts hovering around these issues but they seem to ignore. I also don’t have time to guide the dumb customer people that this issue is arising. The customer support people are mostly having no knowledge of how fno trades and margin works. A school student could give better answers them.

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If stocks are sold from holdings and debited from client’s demat account after which EPI is done successfully, then upto 80% of the sale proceeds are available for margin reporting on T day. Will check the margin statement and get it fixed, if it’s not reflecting the sale credit. To be able to withdraw funds, you will have to wait till T+2 since the credit from the Exchange comes only on T+2.

Will also get our team to update the support article, it hasn’t been updated after the change in rules. Thanks for bringing this to our notice. @mohitmehra

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Well, latest daily margin statement does not show 80% sale proceeds because of which margin statement has negative margin statement - my concern is margin statement you send to clients is the same margin you report to exchange ? That means I will have margin penalty from exchange? Or exchange has its own mechanism to check client’s margins?

I think your margin statement does now show margin credit from sale proceeds until T+2 - my observation is …it does not show 80% credit on T day, neither it shows remaining 20% credit on T+1 day. @mohitmehra @siva @VenuMadhav

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As I’ve said earlier, if the stock is sold from demat, debited and EPI is done, 80% of the sale value will be considered towards margins reporting. Will review the values being shown on the MS.

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I believe EPI is done by Zerodha on T day by default (automatic by system) - is there any way a client can check if EPI is done for this sold stocks on T day? if yes where can a client check? …is it possible that in some cases EPI is not done by Zerodha either due to your system failure or something similar ?

It will be done if shares are present in demat.

It can be possible but luckily it didn’t happen in last 5 months.

You are accursing me that I am repeating my question …
When I raised a support ticket about why 80% of sold shares - is not added to available cash margin.

This is the response I got from your team member -

“As per the query, when you sell the shares 80% of the sell value will not add to the statement as it will not be considered for the margin without completing the settlement cycle”

So within Zerodha itself one person say something and other say something totally opposite.
Whom should I believe ? You and @VenuMadhav ?

Since he is listed as compliance officer so he is taking responsibility of his words? @VenuMadhav @siva

Please dm me the ticket number.

I bought and sold nifty futures multiple times for small spread (scalping) and squared off positions in the end.I initiated another position only if earlier position was squared off.I have margins for one lot only. Will I have margin shortfall because of such a high number of trades. Please clarify. @siva