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

I understand from this post that from June 1st I will be charged a penalty if I don’t have requisite SPAN and Exposure margin in my trading account.

Earlier the penalty was applicable only if money in my account was lesser than the SPAN margin required. Can someone explain how much exactly is the penalty?

From this page on NSE. Penalty is on the money you are short by.

Short collection for each client Penalty percentage
(< Rs 1 lakh) And (< 10% of applicable margin) 0.5%
(= Rs 1 lakh) Or (= 10% of applicable margin) 1.0%

If short/non-collection of margins for a client continues for more than 3 consecutive days, then penalty of 5% of the shortfall amount shall be levied for each day of continued shortfall beyond the 3rd day of shortfall.

If short/non-collection of margins for a client takes place for more than 5 days in a month, then penalty of 5% of the shortfall amount shall be levied for each day, during the month, beyond the 5th day of shortfall.

Notwithstanding the above, if short collection of margin from clients is caused due to movement of 3% or more in the Nifty 50 (close to close) on a given day, (day T), then, the penalty for short collection shall be imposed only if the shortfall continues to T+2 day.


If my ledger shows negative balance on Friday so will I be charged margin penalty of one day only or of three days including Saturday and Sunday . @siva , also does margin is charged on the amount of negative balance shown in ledger or something else.


@Prakhar_Agrawal margin penalty is levied on overnight positions in case your unencumbered or free balance is not sufficient to fulfill the total margin requirement (SPAN +Exposure). It is not necessary that the penalty is charged only when you have a debit balance in your ledger, as it includes unsettled credits as well (For eg: the credit from the sale of equity shows up on the T day itself whereas the funds actually hit your trading account on T+2). You may go through this support article to know more. A comprehensive explanation is provided by @VenuMadhav in the below post.


Okay thank you.
One more query is I am short of margin on friday and cover it on Monday will I be charged or penalty for only one day or three days including Saturday and Sunday.

Saturday and Sunday isn’t considered. Margin penalty is charged for a day only, excluding the holidays.


@VenuMadhav @siva is margin penalty based on pan number or client id of brokerage.

Its based on the client ID, for trades carried out with a particular broker. One broker will not receive any information of your account with another broker.


Is it still same or rules changed ? margin penalty is not charged during weekend /holidays ? @ShubhS9

Is this still valid ? or now that Zerodha do early pay in to T day itself - credit received from sold demat holding is considered settled/unencumbered credit and that is added when reported to exchange for available margin ? @siva @Bhuvan @Nakul @nithin

Nakul or myself will reply you in sometime, even weekends is off for us, also you have tagged us in multiple threads for somewhat related queries, give us also sometime to get back. Also don’t tag Nithin for general queries, you can tag him if you don’t get any response from us or you think if he only can answer.

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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