You plan to start it?
Sorry but I didn’t know this.
I want to move a large position. I have already opened account.
Exchange and Other brokers allow this and hence I thought zerodha would also allow.
I am ok to provide liquid fund also 100% for mcx
We are working on having single ledger for both mcx and eq then this will be possible, as of now we don’t offer, single ledger can take some more time.
1 Like
can I use nse account free cash balance to trade in mcx after 5 pm ?
Not possible. Both has separate ledgers.
I have a scenario … suppose I have liquid funds worth 10 lakhs pledged with zerodha for margin. And i sell an option of Gail (lot 6100 and SP 100) which gets assigned to me at end of month.
Do i have to unpledge liquid funds and sell them to have cash for buying those GAIL shares as part of my obligation.
Or since its already pledge Zerodha will sell them and use cash proceeds to buy GAIL shares.
What would be the charges in these cases?
Thanks
1 Like
Zerodha will not unpledge and sell your shares. Depending on your Short Position (CE or PE) you will have to make shares available (if short CE as you are obliged to deliver shares) or make funds available (if short PE as you are obliged to take delivery) for physical settlement.
Failing to do so.
In case Short CE expires ITM (Give Delivery):
In the event that you do not have the required quantity of shares, this settlement would result in a short delivery. Appropriate penalties shall be charged on such short deliveries. This can be as much as 20% or more. Read more on the consequences of short delivery here.
In case of Short PE (Recieve Shares): When your Short PE expires ITM you are obliged to take delivery of shares and you will require funds equivalent to Strike Price * Lot Size * Number of Lots in your account. If you don’t have funds your account will result in debit balance.
You are required to bring in funds if your account results in a debit balance after physical delivery failing which the delivered shares will be liquidated to make good of the debit balance. Interest will be charged at 0.05% per day on the debit balance in the account.
You can read more here.
1 Like
Thanks for quick revert. That clarifies
Ashutosh
I have a scenario.
Assume that I have margin worth 10 lakhs by pledging stocks, and another 10 lakhs margin by pledging liquid funds.
In total, I have 20 lakhs of margin.
Now, say for example I short a Reliance CE of strike price 2200 @30 Rs (1 Lot)
Reliance starts to go up and 2200 CE is now at 50 Rs.
This change from 30 to 50, would result in increase of margin. Can this change be offset by additional margin (Which is already available in my account) or do I need to bring cash to offset it?
In the case my position is at a loss(Option Writing), when am I required to bring cash? Only when I square off the trade or before that?
Is this the same when Buying/Selling Futures?
Thanks a lot!!
Even after taking Short position, you will have sufficient funds in your account, no need to add extra funds if margin requirement increases.
Again, in a scenario you have represented you have enough funds in your account. Any loss you make will be debited from your free cash, no need to add extra funds.
There’s no cash.
The margin present in account is by pledging stocks and liquid funds.
At last, the loss that is incurred will have to be cash settled, wont it?
Yes, in you will have to bring cash to settle your incurred loss.
Exactly, this is my question.
When I short the option, the MTM loss would be settled by margin in account and when I square off the trade, the loss would be cash settled. Right?
But for futures, all types of losses be that MTM or when I square off the trade would have to be cash settled, or can this be also settled using margin?
That will be unrealised loss until you square-off your position, when you square-off your position and don’t have free cash to fund the loss your account will result in debit balance.
In this case you will have to add funds or your pledged shares will be sold to the extent of debit balance, there is also interest charged at 0.05% per day.
Profit and Loss arising from Futures is cash settled every day. If you incur losses, you will need to have free cash in your account, if not, it will result in debit balance. Again, as explained above you will have to add funds or your pledged shares will be sold to the extent of debit balance and there is also interest charged at 0.05% per day on debit balance.
can hdfc corporate bond (pledged) collateral used as cash equivalent( like liquid fund) or 50% cash margin is required for taking position?
@zerodha
1 Like
can hdfc corporate bond collateral be used as cash equivalent like liquid fund or 50% cash margin is required
1 Like
Hi,
I have taken F&O overnight position by selling 1 lot and buying 1 lot…and margin blocked is 50000 rs…cash available in account is 25000 rs. and collateral margin available is 25000 rs…now my question is do I need to have extra cash for covering the above bought lot (as I understand tat margin can be used only for option selling but not buying)?..or I need to have extra cash only if I want to buy further overnight options?
You don’t need any margin to square-off your position.
1 Like
Hi @nithin,
I had pledged shares and had margin (From pledged shares) of about 6L. I had zero cash balance.
With this, I bought March Futures (overnight position) of 3L one week back.
Now, as i understand, since 50% of this 3L (i.e. 1.5L) had to come from cash. Since i didnt have this cash, interest on this will be charged, which is OK.
But today, i got the following SMS from Zerodha.
“Your trading a/c is in a debit owing to your trades. Please note that daily MTM losses have to be settled by transferring funds to your trading account. Your pledged (collateral) stocks may be sold up to the extent of the cash debit in your account. Please Add funds”.
My query is:
- why am i getting this message? Is it not that, whatever the cash debit balance will be charged interest and accordingly, I should not be getting this message, before I square off my position.
- May be, I am missing something here. Can you please explain this message with an example calculation.
- How much time do I have to settle this fund request.
Thanks,
Uttam
1 Like
Uttam, Futures are marked to market, means any profit or loss you make is credited to / debited from your account on same day. You can check out this Varsity chapter explaining this in detail.
The collateral margin you have, cannot be used for settling losses or charges arising from trading. For this you’ll need cash in your account, not having sufficient cash balance will result in debit balance.
Hence, you received this message.
If you haven’t funded the account, even after 24 hrs of notifying, the securitues you’ve pledged can be squared-off. Explained here.
2 Likes