Your explanation is not clear to me. Please separate your statements with full stop.
If you want to sell 9900 PE and hold 10000 PE, you should have enough (same) margin irrespective of whether you exit 10000 PE and enter a new spread [Long 10000 PE, short 9900 PE] or if you want to sell 9900 PE alone directly.
why this would need additional funds?
So, here is my problem with Zerodha margin calculator and how I got scammed (well, trusted margin calculator, took positions, then ended up paying HUUUUUUGE margin shortfall). Don’t know where lies the issue, it is NSE’s problem or Zerodha’s problem.
Scenario below:
Margin Calculator says:
SELL 1 Lot of NIFTY 11500 CE & BUY 1 Lot of NIFTY 11700 CE --> costs you around 29K margin
(add the cost of buying option etc. would make it around 31K or 32K)
Now, the interesting part.
Margin calculator says:
SELL 1 Lot of NIFTY 11500 CE & BUY 2 Lots of NIFTY 11700 CE --> costs you around 17.4K margin
(add the cost of buying option etc. should make it around 20K? no?)
Based on this, I thought I got lucky and, kind, of doubled my positions.
At this stage, even on Kite platform (obviously during market hours), the dashboard also reflected the same, showing that I have enough margin/balance unused.
I went to bed that night not thinking much.
Next morning when I see, KITE says I have HUGEE -ve balance and rest of the story is explained in this thread itself above.
Now, who’s fault is it? Zerodha or NSE?
Or mine?
Margin calculation is correct.
Maybe you used unsettled funds to take the trade or you failed to maintain 50:50 Cash - Collateral ratio (for overnight positions, at least 50% margin should compulsory come in cash or equivalent and remaining can come from Collateral).
- I did not have any unsettled funds. I had no previous opened positions prior to that day. I went in with 100% cash that day.
- I do only f&o. No collateral. I don’t have any equity etc.
It’s all there in my ledger. I opened ticket twice for explanation. Still no satisfying answer.
So I settled myself with this new normal, not to do it again
I have asked team to check and they did, as said it seems EOD span is increased and charged accordingly, rarely that can happen.
No problem Shiva. I have moved on now. Guess this is new experience for all parties…
@nithin @siva-reddy I have observed that the margins on the last two days of monthly expiry are going abnormally high on hedged stock option positions, as against just 2X. Take an example of a credit spread, on which the margin has come down after the implementation of the new margin framework for hedged positions. However, on the last 2 days, the margin goes up exponentially. I think you are increasing the margins on the short leg separately as per the old calculation and not giving the benefit of the hedge during the last 2 days. Is that a correct inference or am I missing something?
I’ve explained here how margin benefit works on last two days of Expiry, you can give it a read…
2 Likes
@ShubhS9 @siva-reddy
Why hedging benefits doesn’t apply to shares (instead of futures)?
Any reasons?
Example:- buying shares (instead of futures) + buying puts
Not much benefit in MIS for strategies as we block 100% of exposure for intraday also.
Infra should be built for that in India at exchange level.
1 Like
What if the exposure is less but span is high? in intraday case
Then you get reduction in span, but for hedge strategies it will never be that way.
any further discussion happening in sebi to bring risk based margin system for hedged trading
1)roi will improve significantly
2)people will stop buying far otm worthless option
3)new breed of traders can began and history can be written
4)as margin will increase for intraday trade this will increase impact cost
5)pls make our voices heard to sebi (brokers pls definitely you will have advantage too in terms of revenue)
@siva-reddy really is irritable to trade in nifty , i try to do a option strategy in nifty as bear call spread 11700 sell and 11800 buy but what use , the system is rejected , i cannot get any nifty trade in zerodha , even i am trading with capital of 50 L you guys are not taking a serious about this OI problem , i am really forced to look other broker
even i am paying on different trade as commission to zeroda itself 30k every month , but you are not helping us …
you are giving permission to trade very close to the LTP , its not possible fo me , i am a very conservative option trader ,you are zipping the strike price , better ban nifty trading from zerodha , i really fedup ,
Dont tell to open in ORBIS , I lost lot of oppourtunity to trade in nifty option , because of your OI and shut
Can you sell first and then can place buy order as same as sell quantity.
1 Like
ok i will try
@siva-reddy, Nifty has a freeze quantity limit of 7500. If someone has to buy 30000 call option in nifty. How to do it in one click?