If I have a hedge, I always exit the hedge legs first, ensure there is enough margin and then exit the sold options. I also checked the contract note, went through the trades on that particular day to confirm the same.
Further, quoting the reply to my ticket by the customer support executive “Its non upfront penalty, not due to breaking of hedge.”
On a related note, I find the level of replies given by the customer support executive is not up to the mark. A large part of the reply appears canned/copy-pasted, and illogical. It looks like the person is replying without fully reading or understanding my queries.
In such cases, is there a way to escalate the ticket and get someone else to handle it?
Ticket number is #20241125675632 if you want to take a look
The customer care answer are absolute trash. They seem to be just copy pasting generic details which are mostly available on the faq.
I asked for details of time stamp of when my peak margin increased the margin of the account, the only answer i got is it is for this day and the value of amount. We dont have any other details of what time during the dayz which position etc… Nothing at all.
They just expect you to believe it and pay up without giving any details.
I got charged close to 1 lakh on the same issue.
@VenuMadhav
Can you please ask someone logical im that team to look into my case as well. Ticket number #20241125814765.
Happy to get on a call with them to better understand the issue.
Hi @VenuMadhav
Could you please help me with a genuine query? i was recently(on 26th Nov) charged a whopping 1.5L as margin shortfall penalty for FNO trades placed on 18th Nov. Now, I do understand the maths and system of calculating these penalty charges by NSE and Zerodha broker, but what I dont understand is how the client would intuitively know the impact of placing such orders.
For example, I clearly remember exiting few long options before closing short option positions because of which i was warned with margin shortfall. It actually led to around 25L of short margin in my funds capital worth 6L only. But I had immediately closed the all the positions within a matter of minutes. It was only after 7-8 days I realized that I was charged penalty on it.
Query: how could I have avoided it even after closing all the positions? Even if I would have understood the system then, I wont have been able to transfer a difference of 25L to my account to not let the penalty occur. Overall I feel pretty much unfair and unjustified with this much of charge. Kindly help!
The easiest way is to not let a margin shortfall arise. Closing the long leg before the short leg, will invariably increase your margin on account of your position becoming unhedged.
As far as the snapshots go, they’re random. I’m not surprised that the snapshot was taken during the brief time that your position was unhedged, have seen this happen multiple times in the past. Bringing in fund post facto while works, is not technically allowed since the funds are expected to be available in “advance” of trade.
I have repeatedly given feedback to Zerodha on this and asked them to build features for communicating stuff related to margins better. They just don’t care.
Best to move out of Zerodha as soon as you get an option.
@VenuMadhav I have one question. Sometimes, even without taking a trade during the day, the margin can be negative due to market conditions on overnight positions. Let’s say, it is for short duration and not high enough for RMS team to square off the positions.
Suppose there is a snapshot during this short duration when the marign was negative due to overnight positions, will any kind of penalty be applicable to it?
Hello @VenuMadhav
I got an email today for the sell option positions I have with the following message:
As per exchange regulations on Extreme Loss Margin, an additional exposure margin of ₹some-amount/- is applicable on short option positions of NIFTY expiring tomorrow. Ensure to maintain sufficient funds in your trading account before the market opens to avoid square-off of positions.
I am really worried about the charges this might imply to me. Will I be penalized later with charges or the system will just square off the positions at market start.
@loke4300 thanks for responding. Did you also receive a margin shortfall email? I received it even though I had around 3L funds visible in my account. Not sure how the margin shortfall can happen.
We sent a communication yesterday that includes how much the approximate margin will increase because of this 2% additional ELM. The client can bring in funds before 9.15 AM or square off position once the market opens to avoid margin penalty.
@Ragavendran_M thanks for your response. If we sq off positions sharp at 9:15, is there a chance system takes a snapshot and still report margin shortfall?