Hi Team,
I noticed that the MTF margins are now reduced to 2x across all stocks however my existing MTF stocks are bought earlier when the MTF margins were higher (Between 3x to 3.5x).
Will this create MTM requirements and therefore margins calls for me?
Why is the margin suddenly changed to 2x for all stocks?
Is this a temporary change during Budget day volatility or a permanent change.
It will not create any MTM requirement. Margins are increased today and tomorrow due to expected volatility. Your previous positions will not be affected due to this change.
Thanks for clarifying 
@Ragavendran_M, Lets say I sold today 1 Lakh worth of liquidcase ETFs which I was holding since 10 days. As per the new norms , immediately 100% of the margin is available for trades. Also, I had zero margin in wallet before liquidcase sell.
But when I am trying to trade the same day in MCX or MTF , it is showing margin not sufficient. No issues with CNC.Can you confirm if this is an isssue?
It is not an issue. CNC sell credit cannot be used for MTF on the same day. Once the settlement happens you can use the amount to purchase MTF.
Sir, You have been recommending to use ATO for MTF till the time GTT for MTF is not ready. But please note that ATO does not have facility like that of GTT where we could compare real time price with the our price in ATO also ATO does have any facility to download data. ATO does not show on screen about the BUY or SELL order we have placed if ATO get triggered. There are so much limitation in ATO. Do you have any plan to make ATO to have similar facility like that of GTT? Any update on this. As same we asked before 29 days. Till date no reply.
Till date MTF option in GTT and AMO is not available. Also there has been no increase in maximum limit of 50.00 lakh in MTF. It has been more than 2 months that you committed that this will happen. What is the exact status and when it will be done?
@Ragavendran_M , @nithin , @VenuMadhav
What I feel is from a short to medium term investment point of view, MTF conversion to delivery is very much required. Let me explain why :
I buy 5 stocks A,B,C,D,E. Initially first 3(A,B,C) I took on cash. D&E I took on margin. Now, I exited stock B and have surplus margin. Still D & E are on margin. I can save interest by converting them to delivery. At present I have to first sell them and buy them on CNC.
This feature should be implemented asap.
Hey i noticed maximum leverage offered is 3.3X now can you list down parameters when Initial Margin requirement is changed and any ETA when it will be reversed back to existing ones, what is your timeframe for periodic review ?
Completely agree on this, we will allow converting MTF to delivery soon.
Because of budget we have changed leverages, from Monday it will be normal.
GTT for MTF will take time, AMOs should be available in coming week.
We will also increase this limit very soon.
Thankyou
If i have 100 Reliance in my demat and if i pledge it for margin , then can i buy shares using MTF out of that funds for swing trading?
You can take MTF trade only with pure cash, not with collateral margin after pledging shares.
Hi Team,
I have a general query on how Zerodha risk management team decides to square off MTF and F&O positions.
I have following questions:
a) Suppose my Account is in Debit balance today and has sufficient margins via pledging shares as collaterals, will Zerodha team still square off open positions to cover the debit balance in account?
b) Suppose the debit balance is created due to MTM of F&O positions and not because of MTF positions, zerodha is still sending email to me with full margin shortfall attributed to MTF positions, which is not true. Bulk of MTM is caused by F&O positions not by MTF, I believe.
c) Suppose yesterdayâs price action caused a MTM shortfall. So account opened with a debit balance today morning. But when market opened positions are again green. Will this cause a sell trigger by Zerodha without factoring todayâs MTM gains?
d) In case something has to be sold to raise margins, how will zerodha decide which instrument to sell? Suppose I have multiple F&O and MTF positions? Which ones will be sold first by Zerodha to generate margins? Are the profitable trades sold first or the loss making trades?
We do not close but account cash balance will go into negative so one canât use collateral or taking any new positions, alert will be generated though for MTF losses.
We donât , maybe portfolio is combination of losses from both or collateral one with losses, for exact reason you can create ticket so they can check your portfolio and reply.
In this case , No, once negative MTF position turn positive then no sell trigger will be generated, but in mtf every position is different, I mean profit from one MTF position is not compensated for another position loss in MTF.
Itâs at our RMS discretion, but we will never close psotive positions to compensate for loss positions, so we start with cutting loss positions first.
Also we will not close fno positions if MTF is in loss and viceversa.
Thanks Siva,
Just one follow up query:
Why is it that you donât count the MTF book per client on an aggregate basis and take risk management for each position instead?
Just for illustration,
Letâs say, I have 5 MTF positions, 3 MTF are in profits adding to 1 lakh, and 2 MTF positions are in loss adding to 80k. Now, in this scenario, the aggregate MTF positions are in 20k profits.
By logic there should be zero MTM blocked and no square off till the account is in positive overall. This happens seamlessly for F&O positions.
However, Zerodha follows a different accounting process for MTM of MTF positions. It is not at aggregate level but at each security level.
So, in my example above, even though the account is in 20k profits, zerodha will still block 80k for MTM losses and also Zerodha will square off if a single position exceeds >20% of initial funded margin.
You should ideally follow a basket approach to MTM funds for MTF book, just like F&O.
Off context, one more question, are there plans to increase the limits (50l per account and 10l per security).
Currently, your algorithms do not even allow a MTF funding of 10l per security. It takes 10l on the overall value including initial margin. If possible, put the capping on 10l of MTF funded value (excluding client margin) until the time you plan to increase these limits.
Thanks, and really appreciate the team being so responsive!
MTF wonât work that way, only loss is aggregated and not profits, because there is no concept of marking to market in MTF, only works for Futures.
This is not our rule but from regulators.
Yeah, that is over all value , anyhow we will increase this very soon.
Thanks Siva! Appreciate your prompt responses.