# MIS Stocks - Risk management
**URL:** https://tradingqna.com/t/mis-stocks-risk-management/189158
**Category:** Stocks
**Created:** [November 30, 2025, 5:17pm UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158 "2025-11-30T17:17:47Z")
**Posts on this page:** 20
**Page:** 1
### Author:  [@the\_rock](https://tradingqna.com/u/the_rock)
#### Post date: [November 30, 2025, 5:17pm UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/1 "2025-11-30T17:17:47Z")
Assume trading on MIS stocks. There is 5x leverage.
When leverage is dried out everywhere, this MIS things seems to have remained the same for quite some time. (Please correct me if I am wrong on this).
The regulator does not seem to pay attention to it.
1. Why so ? Is it because of being the main revenue generator for brokers ? Or…
2. Is it because MIS stock trading is safer ?
Well, there is 5x leverage involved and nobody is even interested in referring to it as ‘safe’.
1. What gives a broker comfort to continue offerring such a product ?
Also have a few more doubts on MIS. Appreciate your feedback. Thanks 🙂
1. Does the MIS leverage remain constant during the day ?
2. Does Zerodha/Any broker guarantee that the position will be squared off when approaching 20% down for the day when no additional money is added to account?
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### Author:  [@the\_rock](https://tradingqna.com/u/the_rock)
#### Post date: [November 30, 2025, 5:34pm UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/2 "2025-11-30T17:34:06Z")
Few more questions.
Only interested in MIS stock buying.
1. What happens if trader/broker is unable to square off before market close ? Reason could be upper circuit.
2. Assuming the account has no holdings other than just enough cash to make MIS long trades, what is the result of inability to square off the long positions before market close in following situations.
a. Upper circuit/market halt
b. Lower circuit/market halt
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### Author:  [@BB789](https://tradingqna.com/u/BB789)
#### Post date: [December 1, 2025, 2:17am UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/3 "2025-12-01T02:17:12Z")
Can’t speak to the broker or their intentions(@siva can probably answer that). But the last two questions. If a position can’t be closed, You’ll be forced to carry overnight positions. The full amount(without leverage) needed will be deducted from your account and you’ll have negative balance. You’ll have to pay interest on the negative balance + actual share losses, whenever broker can sell your positions(i.e., when circuit opens).
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### Author:  [@the\_rock](https://tradingqna.com/u/the_rock)
#### Post date: [December 1, 2025, 3:33am UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/4 "2025-12-01T03:33:21Z")
Thank you @BB789
Paying a little interest (hope it is little) seems fine if the position was not closed.
I came to know that some brokers force liquidate existing holdings to cover the negative balance.
That is why I specifically mentioned. “assuming account has no holdings other than enough cash for MIS long trades” in last 2 questions!
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### Author:  [@BB789](https://tradingqna.com/u/BB789)
#### Post date: [December 1, 2025, 4:12am UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/5 "2025-12-01T04:12:07Z")
> [@the\_rock](#):
>
> I came to know that some brokers force liquidate existing holdings to cover the negative balance.
I don’t think broker can legally sell your holdings. But, if sold(by you or anyone else), it’ll cover the negative balance first. So you can’t take that money either. The above doesn’t hold true, if stocks are pledged. Pledged holdings can be legally sold by broker anytime to cover, if there’s a negative balance. This is called a margin call. Though, zerodha staff here havea “unwritten” rule, that they only sell if margin drops below 60%
Official:
> **[Policies and Procedures](https://zerodha.com/policies-and-procedures)**
>
> Online stock brokerage platform for trading and investing in stocks, futures, options, commodities, currency, ETFs, mutual funds, and bonds.
> **[By when should I add additional margins if I receive a margin call?](https://support.zerodha.com/category/trading-and-markets/margins/margin-leverage-and-product-and-order-types/articles/margin-call-timeline)**
>
> By when should I add additional margins if I receive a margin call?
> Your positions will be squared off at the discretion of Zerodha if you don’t add the required funds within the specified time.
> **[Why is my intraday position not auto squared off?](https://support.zerodha.com/category/trading-and-markets/charts-and-orders/order/articles/auto-square-off-policy)**
>
> Why is my intraday position not auto squared off?
> **[What does "Delayed payment charges" entry on the funds statement mean?](https://support.zerodha.com/category/console/ledger/articles/interest-charges)**
>
> What does "Delayed payment charges" entry on the funds statement mean?
Interest is usually 18%pa in this case.
Margin penalty:
> **[How is the margin penalty calculated?](https://support.zerodha.com/category/trading-and-markets/margins/margin-reporting-and-margin-penalty/articles/what-is-margin-penalty-and-how-does-it-work)**
>
> How is the margin penalty calculated?
Not sure if there will be margin penalty, since it becomes a CNC trade.
Unwritten word of mouth:
> [@What is zerodha margin call policy?](https://tradingqna.com/t/what-is-zerodha-margin-call-policy/59580/4):
>
> If losses crossing more than 60 to 70 %, we will square off any time.
That is if it is 60% of value of pledged holdings or cash available. Ofc, if there’s nothing to square off and stock can’t be sold, you’ll be paying interest as “Delayed payment charge”(along with margin penalty if any.)
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### Author:  [@SpacemanSpiff](https://tradingqna.com/u/SpacemanSpiff)
#### Post date: [December 1, 2025, 4:19am UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/6 "2025-12-01T04:19:28Z")
While looking at extreme cases is fine ( say stops cancelled and cannot send ), a warning just in case - dont trade in such a way that the 5x leverage can wipe out capital in a single day at say -20% for a stock.
Ideally atleast diversify into a basket of trades
Also, brokers used to offer 50x or so until SEBI forced reduction to max 5x now. Zerodha used to give less back then, not sure maybe 10x?
That was a good move. But go too far and it will hinder trading. Equity already has lower liquidity.
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### Author:  [@BB789](https://tradingqna.com/u/BB789)
#### Post date: [December 1, 2025, 4:21am UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/7 "2025-12-01T04:21:54Z")
Yeah 10x… I don’t remember 50x
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### Author:  [@siva](https://tradingqna.com/u/siva)
#### Post date: [December 1, 2025, 4:22am UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/8 "2025-12-01T04:22:29Z")
> [@the\_rock](#):
>
> 1. Why so ? Is it because of being the main revenue generator for brokers ? Or…
> 2. Is it because MIS stock trading is safer ?
MIS adds a lot of liquidity to stocks. It is good for everyone, including brokers.
> [@the\_rock](#):
>
> Does the MIS leverage remain constant during the day ?
Most of the times it remain the same.
> [@the\_rock](#):
>
> Does Zerodha/Any broker guarantee that the position will be squared off when approaching 20% down for the day when no additional money is added to account?
There will be no guarantee given, user should understand the risks involved in trading in MIS.
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### Author:  [@SpacemanSpiff](https://tradingqna.com/u/SpacemanSpiff)
#### Post date: [December 1, 2025, 4:22am UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/9 "2025-12-01T04:22:38Z")
Other brokers gave, ex wisdom and i think Kotak too.
And almost all gave more than Zerodha i think. It used to be a negative point about Zerodha, hehe.
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### Author:  [@BB789](https://tradingqna.com/u/BB789)
#### Post date: [December 1, 2025, 4:24am UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/10 "2025-12-01T04:24:55Z")
Would margin penalty apply in this case(Buy and LC)? It becomes a forced CNC trade and I think margin penalty don’t apply and only delayed payment charges will apply. Am I right?
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### Author:  [@siva](https://tradingqna.com/u/siva)
#### Post date: [December 1, 2025, 4:32am UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/11 "2025-12-01T04:32:18Z")
> [@BB789](#):
>
> It becomes a forced CNC trade and I think margin penalty don’t apply and only delayed payment charges will apply. Am I right?
Right, but next day we will force closure that position.
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### Author:  [@niftymonk](https://tradingqna.com/u/niftymonk)
#### Post date: [December 1, 2025, 5:47am UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/12 "2025-12-01T05:47:37Z")
> [@the\_rock](#):
>
> The regulator does not seem to pay attention to it.
lol, i remember 50x leverage for MIS in 2018. 5x is safe trust me.
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### Author:  [@BB789](https://tradingqna.com/u/BB789)
#### Post date: [December 1, 2025, 6:25am UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/13 "2025-12-01T06:25:21Z")
> [@siva](#):
>
> next day we will force closure that position.
Stocks hitting LC will keep on hitting LC a few days(like `CIANAGRO`). So, what if you can’t close the next day?
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### Author:  [@the\_rock](https://tradingqna.com/u/the_rock)
#### Post date: [December 1, 2025, 6:26am UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/14 "2025-12-01T06:26:55Z")
50x is MADNESS!! WOW!
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### Author:  [@the\_rock](https://tradingqna.com/u/the_rock)
#### Post date: [December 1, 2025, 6:27am UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/15 "2025-12-01T06:27:19Z")
Yes, agree 100%
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### Author:  [@the\_rock](https://tradingqna.com/u/the_rock)
#### Post date: [December 1, 2025, 6:27am UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/16 "2025-12-01T06:27:53Z")
Thank you @siva
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### Author:  [@the\_rock](https://tradingqna.com/u/the_rock)
#### Post date: [December 1, 2025, 6:30am UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/17 "2025-12-01T06:30:51Z")
This is from a different broker… Here I read holdings could be liquidated to cover insufficient funds.
[https://rmoneyindia.com/support/what-happens-to-my-intraday-mis-co-position-if-the-stock-hits-the-circuit-limit](https://rmoneyindia.com/support/what-happens-to-my-intraday-mis-co-position-if-the-stock-hits-the-circuit-limit)
I guess each broker has their own way of dealing with stuff.
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### Author:  [@siva](https://tradingqna.com/u/siva)
#### Post date: [December 1, 2025, 6:40am UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/18 "2025-12-01T06:40:16Z")
> [@BB789](#):
>
> Stocks hitting LC will keep on hitting LC a few days(like `CIANAGRO`). So, what if you can’t close the next day?
We don’t offer MIS in these kind of stocks, we monitor stock movements and based on volatility we offer mis.
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### Author:  [@Options\_Spec](https://tradingqna.com/u/Options_Spec)
#### Post date: [December 1, 2025, 8:42am UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/19 "2025-12-01T08:42:37Z")
@siva do you expect any changes to the current MIS segment ( any increase in leverage / Sebi discontinuing this feature )
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### Author:  [@siva](https://tradingqna.com/u/siva)
#### Post date: [December 1, 2025, 8:46am UTC](https://tradingqna.com/t/mis-stocks-risk-management/189158/20 "2025-12-01T08:46:04Z")
> [@Options\_Spec](#):
>
> do you expect any changes to the current MIS segment ( any increase in leverage / Sebi discontinuing this feature )
My guess is as good as yours, personally I think they don’t interfere in this anytime soon.
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