There won’t be any margin block in case if you had positions which are expired. Since there is no margins blocked for expired one, free settled funds are available for withdrawal.
Usually EOD SPAN file available from CC at around 5:30PM and gets uploaded by 5:45PM.
Thanks for the prompt reply. In my example I had stated taking Rs. 50 lakhs worth of position using collateral stock margin only without having any cash margins. As you have stated that there won’t be any EOD margin requirement for expired positions, I presume no interest will be charged for 50% cash margin shortfall even though the EOD margin will be blocked in the terminal for overnight and will be released only the next day morning. KINDLY CONFIRM WHETHER MY PRESUMPTION IS CORRECT.
I have one another continuation question in this regard. Let us say I bring in Rs. 25 lakhs cash margin so that the Rs. 50 lakhs positions taken on the expiry day (and expiring the same day at 3.30 pm) comprises of Rs. 25 lakhs stock margin + Rs. 25 lakhs cash margin.
Let us also say that, after taking the above positions, I still have another Rs. 50 lakhs of unutilized stock margins that I now use for taking index options positions that expire only the next week and will be carried forward overnight after today’s weekly expiry. I have taken these overnight positions without 50% cash margin on the expectations that upon expiry of this week’s positions at 3.30 pm (without me closing the same before 3.330 pm), the Rs. 25 lakhs cash margin blocked will get released and will get utilized towards the 50% cash margin requirements for the next week’s expiry positions to ensure that there no interest gets charged for shortfall in cash margin requirements on overnight positions even though the EOD margin will be shown as blocked in the terminal for overnight and will be released only the next day morning. KINDLY CONFIRM WHETHER MY PRESUMPTION IS CORRECT.
@Anath, thanks for your feedback. The terminal shows that EOD margins are blocked even by 11.00 pm:
And hence my confusions and queries on when margins get freed up after expiry of positions at 3.30 pm on the weekly or monthly expiry days and the consequential queries on interest for shortfall in cash margin requirements.
As there is no EOD margin requirement for expired positions there won’t be any interest charges on the utilized collateral margins.
Interest will be charged only if a 50% cash margin is not maintained for the non-expired carry-forward position
Thanks for clarifying one of my biggest doubts. I’ve placed my trades accordingly in the weekly expiry day today letting the index options expire worthless while pocketing the premiums.
One portion of my query remains unanswered. Please have this too clarified. Let’s say that the expired positions at 3.30 pm on the expiry day will free up Rs. 25 lakhs of cash margin. When will this freed up cash margin be used for funding any non-expired carry forward position taken solely based on stock margin only and banking on the freed up cash margin to avoid interest charges - on expiry day EOD or the next day BOD?
In other words, will the non-expired carry forward positions on the expiry day (Thursday) be spared from being hit with 50% cash margin shortfall penalty for Thursday to the extent of the Rs. 25 lakhs that got freed up at 3.30 pm on the expiry day? It sure will be spared on next day (Friday) BOD, but what about Thursday EOD?
No interest will be charged on Thursday EOD as the margin is freed up from expired positions and can be utilized for existing open positions.
Thank you for clarifying all my queries and doubts. I have no further queries.
For yesterday, there’s some discrepancy between the Margin Statement sent out via email & the one which can be downloaded through Console. In the Console one, the EOD margin is showing roughly the same margin which had been left yesterday at market close, but in the Email one, it’s totally different. In the Email one, the EOD margin matches with the Fund Statement on Console.
After the 2nd May update, you normally see the EOD margin on Statement close to what you usually leave on Kite at 3:30, so that makes you think the Console one is right, but that doesn’t tally with the Span + Exposure blocked as shown on Fund Statement on Console, so if Email Margin Statement is the correct one, then that means there was some additional margin blocked by Zerodha yesterday, which is not a great thing…
Hey Sachin,
We are checking this.
Lets say my margin was negative for few minutes during the day. I get a mail for provisional margin shortfall by Zerodha. My EOD margin and cash component are all positive.
a) Does a provisional margin shortfall mean there was a margin shortfall in the SEBI snapshot or it is a peak shortfall that may or may not be reported to the exchange?
b) If I add money before 11:59, will that help Zerodha avert penalty for upfront margin shortfall or damage has already been done? Should i ensure to bring in money even if the EOD margin is positive?
I would like to avoid Zerodha paying a penalty on my behalf but realized post-May 2nd, there have been multiple instances where let’s say I utilize full margin and then because of movement of prices or when I exit one leg and exit another one in a few minutes with a limit order, I end up getting EOD provisional shortfall mail. Hence want to make sure does that mean a certainty of penalty being applied to Zerodha or its a probability. If it’s a probability, a few minutes of the shortfall will more often than not, not result in a snapshot being taken in that timeframe.
Its means there was margin shortfall captured by the exchange (clearing corp) and peak margin penalty will apply.
Yes and yes
Its not a probability, penalty will get applied if you receive the provisional margin shortfall email. It would be best if you exit the margin benefit position last to avoid peak penalties.
Thanks. But I am still not clear on one part. If I add shortfall by 11:59 pm will penalty still apply or it gets waived off?
Hey Ashish,
Yes if you add funds before 11.59 PM there will be no penalty.
If you get provisional margin shortfall mail even when you have a positive fund balance, it’s sure that there is a peak shortfall because this shortfall will be calculated by considering the funds in your account. So whenever you get this type of mail please make sure to add funds before 11.59 PM on the same day otherwise broker will have to bear the penalty.
@Jyothi_P-Deshpande
I don’t think the explanation you offered is correct.
After the May 2nd update there is no penalty on the broker if there is no BOD margin shortage at the time of initiating the trade at any point during the trading hours. There is penalty on the broker only if the broker allows a client’s trade without ensuring adequate BOD margin. But is BOD margin is ensured while initiating the trade, any SPAN changes owing to increased volatility will not result in Peak or EOD penalties (even if there’s insufficient margin in the in the client’s account) because the shortages cannot be attributed to any of client’s actions - and also the EOD margin requirements (based on the EOD SPAN file run at around 5.45 pm daily) are based on BOD margin requirements for the day.
Thus if there is any EOD margin shortfall for no fault of the client who had ensured adequate BOD margins, there is no EOD margin penalty on the trading day but the client has to fund the margin shortage before trading starts at 9.15 am the next day to avoid incurring penalty on the next trading day (penalty will be imposed on account of the exchange snapshot that can happen any time after 9.15 am and this has to be borne by the client and not the broker).
However, if there is any peak margin shortfall on a trading day caused by the actions of the client even if there is no BOD margin shortfall (for example the client closes only the favorable leg of a covered position causing the margins to spike up) and the same gets captured by the random exchange snapshot then the peak margin penalty needs to be borne solely by the client and not by the broker. If the client closes the other leg of the covered position to reduce the margin requirements the client may not face EOD margin shortfall, but still would have to incur peak margin penalty if the same had been captured by the snapshot. Because the timing of the 5 daily snapshots is random, if the client covers the peak margin shortfall before the snapshot is taken then no peak margin penalty can be imposed even though the client had peak margin shortfall for a brief period. Only if the exchange snapshot had captured the peak margin shortfall and triggered an e-mail to the broker will the broker trigger the e-mail to the client. Hence, once the e-mail comes from the broker then peak margin penalty will surely be levied on the client. And there is no question of waiving off the penalty under any circumstances as the damage has already been caused by the exchange snapshot.
To summarize, without any BOD margin shortfall, if any peak margin shortfall is caused by client’s actions and has been captured by the exchange snapshot then there is no way to avoid the penalty. Without any BOD margin shortfall, if any EOD margin shortfall is caused either by the client’s actions (that luckily didn’t get captured by the exchange snapshot) or SPAN changes on account of volatility, then the client has time till 9.15 am on the next trading day to make up the shortfall and EOD margin avoid penalty. Even without making up the EOD margin shortfall on the next trading day by 9.15 am, a lucky client can avoid EOD margin penalty by reducing the positions at the opening bell had the random snapshot had not occurred before that!
Hence, in my opinion, 11.59 pm has no significance or impact on any margin shortfall - BOD (upfront) or Peak or EOD.
However, 11.59 pm will have one significance. That will be the cutoff time for avoiding any 50% cash margin requirement shortfall imposed by the broker even if there is no exchange reportable margin shortfall on account of surplus stock margin collateral.
Anyone may please feel free to highlight any mistakes in my post.
Exchanges are becoming too conservative to the point that it may become painful for traders
If i have a open Position and for which MTM need to be paid if i dont pay on T+1 and close my position so i will be charged penalty
Hey,
Yes, If the non upfront margin shortfall is not met by the T+1 day, the clients will be liable for a non-upfront margin penalty.
HI but if i close my position at market opening still i am liable to pay MTM for previous day
