Just to confirm, if one is holding Nifty Future December Contract which has expiry on 26 Deecember, it can be hold till expiry without any risk of auto-square off, correct? @siva @ShubhS9
Given we maintain enough margin, i.e. 5% additional.
Yes, for futures expiring on that day there will be no additional margin.
Sorry I have a follow up question - is the additional 5% margin requirement mandated in any of the NSE circulars?
The reason I ask is because I can’t find that clause anywhere in the shared link and I’m holding Nifty 25dec 15k and 26dec 15k short puts - which are illiquid with no trades in the last few months. Both of these positions are cash secured, but yesterday I got a notification on kite stating an additional 1.2L margins will be blocked.
Edit: I also think you guys have debited cash from the account instead of blocking additional margins for the odd lots. WTF seriously @siva @Meher_Smaran @nithin
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What the! Can someone please respond what’s happening here
Hi @asen, this additional margin isn’t an exchange requirement, we started blocking additional 5% margin for odd lot positions to cover for any increase in margin requirements if markets move against your position since odd lot positions cannot be squared-off after 24th December for Bank Nifty and 26th December Nifty.
Surely it’s not ethical then to debit 5% cash of the contract value deciding it unanimously.
Additionally when there’s a regulator to do this job, just do a broker’s job and drop this god attitude 
Also, can you tell me how did you arrive at the 1.2L debit amount for -50qty Nifty 25dec 15000 PE and -50qty Nifty 26dec 15000 PE?
And yes, please explain the logic behind debiting cash when you have already broadcasted that you’ll be blocking margins!! (See console statement below)
5% of Contract value (100*Nifty’s CMP)
100(50+50)* Nifty = 5% of (100*23587) = 117,935/-
We understand that there can be slight discomfort in the extremely short run but the decision was taken keeping in mind the long-term that the trader may have to bear in case one wants to exit the position in the later period.
Regarding cash/margin blocking, Checking this with team. Will get back to you.
Aren’t margin calculations done on the contract value (15k in my case instead of CMP)?
Anyway please don’t pick parts of the question and reply. Would appreciate answers to all queries. You just need to block margins and not debit cash.
Anyway, I guess I’ll have to raise a scores ticket. There’s no way I can exit my illiquid nifty 15k positions, and no way I’m giving you guys 1.17 lacs interest free for two years. I think this is the risk one carries dealing with people who think they’re too big to be receptive to reason. Height of stupidity!
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Hi @asen
I am a retail trader myself, and in general I’m against any unilateral actions by brokers, which are detrimental to us.
But in this case, everyone was suggesting to either exit the positions before the deadline, or to add a small quantity to make it a full lot. It seems you did neither.
I added some quantity to make it full lots. My main concern was that since the position cannot be closed, it means even you cannot close your account (e.g. for moving across brokers) or disable FnO for the next two years because of these open positions. That is a much bigger issue than the margin, imo.
Hope you get a solution.
thanks
I get where you are coming from. I think I was initially onboard the Zerodha plans on handling odd lots (evident from my previous replies). And btw, the deadline is 26th dec for monthly expiries. However there are few key issues here, which led to my outburst:
- The positions I’m in are illiquid (25dec 15k and 26dec15k PEs), so no way to exit or add. (One may say, not zerodha’s problem. Agree)
- However, zerodha is being opportunistic here. They are very cleverly calculating the 5% margin on CMP. The max loss for 100qty (50+50 across 2 expiries) nifty15k short PE is 15 Lakhs. With zerodha’s logic, if Nifty theoretically goes to 500,000, they’ll block 25lakhs (5%×500000×100) - which is more than the max loss on the positions. And everything without any guidance from the regulator. So, clearly an opportunistic move @nithin
- And finally, best of them all, they have debited from my cash balance which I had kept to buy niftybees (manual sip investment for Dec). This is inspite of them communicating that they’ll be blocking only margins. @Meher_Smaran I believe has not received any update from the team on the mess up yet.
And finally, on your concern over the open positions @dcd , they’re cash secured puts so I’m not worried for it. Can sell my house to buy nifty below 15k 
Curious to know if you still feel it’s all my fault. Just because zerodha found me on the wrong side of a regulatory storm, this arm twisting of profit generating clients has left me with a very bad taste.
Hi @asen
If there is still a day to take action, I suggest you do so.
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Regarding illiquidity, don’t just look at the market depth, perhaps you can try placing order near to fair price… e.g. if best buyer is at 100, best seller at 150, and fair value is say, 130, then you can try placing your buy order at 133. There are automated market makers who don’t place advance orders, but will gobble up any opportunities they get like this.
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I still think Zerodha has right to protect itself in this case. You say that these are cash-secured puts and you are ready to buy… but let’s say the option price spikes irrationally (especially as it is illiquid), due to this, let’s say your margin is negative, but Zerodha has no way to square off your position! It is a nightmare for a broker…
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It must be daily debit entry in morning and credit entry in evening, just like any other margins like span and exposure. Not sure what you mean by “debiting from cash balance”. Perhaps Zerodha folks can answer this part.
thanks
Your theoretical understanding of how trading works seems impressive. Unfortunately, I can’t feel the same about your reading comprehension.
Nowhere did I mention that zerodha should not be safeguarding itself against the potential risks. All I’m arguing is that the method should be scientific (point 2), and implemented properly (point 3).
I agree. Let the people who understand this answer!
PS: Thanks for the detailed explanation around market depth and order matching. Sometimes irl, things aren’t as uncomplicated, specially around the edge cases.
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Volume willincrease but number of contracts will get reduced,in later stage i guess this game will exclude retail players.
We are blocking additional based on current nifty value,not based on what will happen in future.
I think for a user it should not matter if it is blocked as margin or debiting from cash as I mean user can’t use it.
Let me tell you the reason to block additional 5%, obvious reason is cover our risk, even though we can’t cover our risk fully we tried to balance it out.
Also as these are compulsorily need to hold till expiry, on expiry day with new rules 2% additional margins are required to avoid penalty.
I understand your point of view also as there is no liquidity for you to exit but we also can’t do anything.
Agree to an extent that nifty may not go to 10k types but there is always a chance.
So you mean it doesn’t matter whether you block it from my pledged margins vs blocking cash?? Can I buy stocks using pledged holdings that I can with cash balance? Can I buy options using pledged margins that I can with cash balance?
I’m just speechless. You guys will go to any extent to justify your blunders.
Would have loved if you’d quoted my entire point. Again, you’re saying you, as a broker, carry the same risk on a 15k PE OI, as say a 20k PE? Clearly to me, in the worst case, one has 15k points downside while the other 20k. But anyway, I understand you are just trying to justify your decisions, rather than looking at it with an open mind.
Anyway, thanks for responding.
Ohh you mean block your pledge margin instead direct cash? got it, let me check this with our team.
I checked this with our team, reason for not blocking collateral is user can sell pledge holdings and instantly one gets full money and user can buy something else with it, can do intraday cash or even buy options, hence to mitigate this we are blocking direct cash.