Margin requirements and margin penalty

[Meher_Smaran]

Hi @Nihal_TN

@Nihal_TN

Suppose I do not maintain the prescribed margin, what are the consequences?

Any shortfall due to physical delivery margin requirements will amount to a non-upfront margin shortfall and margin penalty will be charged accordingly.

You can check this thread where Nithin has explained the bifurcation between upfront and non-upfront margin shortfalls in detail.

NSE Circular on Short margin penalty refund

Sharing something we had written for internal use. I will put a detailed blog on this. Circular is applicable for both cash and FO. But in cash there is never any margin penalty issue as the margin is a fixed 20% for intraday and for overnight anyways full money is collected. What are the examples of upfront penalty? We do not allow clients to enter positions without upfront margins collected. However, there are instances where the upfront margin required increases intraday due to the follow…

@Nihal_TN

How many trading days of time do I have after the margin turned to negative, for me to add the funds?(if margin requirements turns negative on Friday, will I have time till Monday to add shortfall margin?)

T+1 day (It will be Monday in this case )

T+1 days here means the next working day, holidays and weekends will not count as cut off days.

In this case, you can bring the shortfall by Monday morning to avoid having the position squared off and a penalty levied.

@Nihal_TN

If I do not maintain the margin requirement, will I be charged margin penalty or will my positions be squared off automatically by RMS team?

Both scenarios are possible depending on the extent of the shortfall and days left for the contract expiry.

@Nihal_TN

If I were to be charged with margin penalty, will the margin penalty be charged on market holidays as well?

Yes. You can check more on calculation of margin penalty here

How is the margin penalty calculated?