Margins are charged on a portfolio basis, they’re not the sum total of margins on individual position which is why it is not possible to break this margin and show margin position-wise.
I already know that.
Suppose I have many positions created in multiple different instruments. One is a Calender Spread of Banknifty - you can separate out margin to this pair of positions. Another is an Ironfly on FinNifty - those positions can be grouped while showing margin blocked by this set of positions.
There will be many different use cases and edge cases on this and I actually thought you guys will apply your own brain to develop the full logic but alas, that looks like a high expectation from this team. You actually want your users to write PRDs for your devs is it?
Or maybe the problem is different. You first have to be open to feedback, recognize that it’s a genuine problem faced by the users and then decide to solve it with ownership. Maybe this loop is broken from the first end, which is what all of your defensive response-making is suggesting.
Not getting defensive, we will try to explore the possibilities. However, doing this will mean writing off the remote possibility of any cross margining benefit you may get while holding positions of two separate underlyings, so the margin at any time may only be an approximation, and will never match the total margin applied on the entire portfolio.
Yes, you should probably divide this into phases -
Phase 1 - Showing approx values and segregation based on instrument.
Phase 2 - Finding ways to improve accuracy of the approx values and thinking about how to handle cross-instrument cases. Also, exploring possibilities to dig deeper within an instrument in case there are multiple legs created over it.
Emphasis should be on conveying
- as deeper margin info as possible to the user
- as easily as possible [viz., a margin split pie chart, margin fluctuation line chart etc.]
- as early as possible so they can manage margins.
And displaying info on the interface instead of relying on intermittent Emails and SMS [which are not the best media here, hope this makes sense].
Is it because of this that the margin used in the funds section keeps changing every 5 mins or so?
Is it possible to block little extra margin say 1.2L + 5% so that I can trade fixed qty strangles / straddles without worrying about orders getting rejected due to a short fall of 1000rs or likewise?
Hi @VenuMadhav , @nithin - sharing one more bug with the margin management systems at zerodha.
I had 5L in non cash equivalent margins and 1L cash in my zerodha account. To avoid DPC, I had only taken positions requiring 2L margins (with 50% of it coming from 1L cash). Today zerodha transferred the 1L cash to my bank account as part of the quarterly settlement process. While I have sufficient non cash margins (5L) to continue holding my positions, you guys have exposed me to DPC since now 100% of my margins are coming from non-cash component.
While I’ve added funds back to my account, I don’t think everyone with a similar situation will notice the issue. And it creates a sweet revenue opportunity for zerodha.
I really wish the team puts in due time and brains to think out all such edge cases (though I’m not sure if the above example is even an edge case). I’m sure you can find some clause in the regulation to safeguard yourself but it’s completely unjust and unethical, making revenue like this. And this thread is full of such examples.
We have not paid out 1L as quarterly payout yesterday, could you dm me your client Id so I can check?
Id: Z*****7
Sorry, missed updating here. Got this verified, this is not the regular Friday quarterly settlement. We’re also to payout users who haven’t traded for 30 days as part of the inactive settlement. However, your account was not due for settlement since you had an open position. We’ll get this fixed. Will ensure you’re not charged interest.
Thanks for checking and responding.
So, they have recently brought back the Peak Margin penalty. For trading purposes, it says that it’ll only apply in case of hedge break (either through exiting or expiry).
@VenuMadhav, to clarify, for any other case, it won’t be passed on to the client?
Even when I’ve just taken Naked Short strangles (nothing else), I’ve received the provisional shortfall email/call & then seen Peak Margin being negative in the Margin Statement the next day. EOD margin was positive & there were no MTM or Delivery margin requirements either.
Yes, brokers are allowed to pass the shortfall penalty on the peak or EOD margin to clients in the case of a hedge break or the expiry of one leg.
@Sanjukumar.K, I don’t think you have read that properly.
Based on the new circular, for ANY OTHER CASE, will it be passed?
Like I mentioned here:
In the above case, for example, will it be passed on or not?
It will not be applied to cases other than the ones mentioned in the circular.
No, you will not get charged for this case.
@Sanjukumar.K
Good morning
Yes, brokers are allowed to pass the shortfall penalty on the peak or EOD margin to clients in the case of a hedge break or the expiry of one leg.
Can you please guide, is this from 1 nov onwards or has it always been the case that broker can pass on non upfront margin shortfall penalty to client side?
I read an article in zerodha where Nithin sir had mentioned that it was from broker side.
Also, if there is margin shortfall penalty, where to confirm this amount?
Invoices section report?
And on what day it is charged?
Same day of shortfall, next day, t+5?
Thank you
Margins are of two types - Upfront & non upfront
In the case of shortfall in non-upfront margins, brokers can recover penalty from the clients. This has always existed.
In the case of hedge break, the ensuing margin shortfall will be in upfront margin. Earlier, a broker couldn’t recover any upfront shortfall penalty from the user. From Nov 01, only upfront shortfall arising out of hedge break cases can be recovered.
Thank you sir.
Can you please address other queries as well?
This will be charged on the ledger.
Brokers get 5 days after trade day to report margins, after which shortfall is calculated and penalty is applied. So the entry on the ledger will be 7 days after trade date. The narration will carry the trade date for which the penalty is being applied.
There has been a margin penalty charged on my ledger. The Zerodha customer support executive is insisting that the penalty is a non-upfront margin penalty.
Can intraday day peak margin penalty be due to shortfall in non-upfront margins? I didn’t have any positions in futures or individual stock options. The cash balance in account was positive. I had overnight banknifty positions and the sum of SPAN+EXPOSURE margins for this overnight position, as shown in ledger, on the day the penalty was charged and also on the day before were well within collateral margins available in my account.
I haven’t had a non-upfront margin penalty charged ever before and I have been doing the same kind of trades for several years now
@VenuMadhav
Peak is always upfront. Have you broken any hedge positions, which may have resulted in higher margins in the peak snapshots? Will have someone reach out via tickets