As per sebi, there is peak margin penalty. And for that it’s duty of broker to take screenshots and share the same with sebi.
But in zerodha kite app, if there is some open position of f&o:
Let say used margin : 50 lacs
Available margin : 20 lacs
And market became volatile little bit due to which there is increased of used margin by 5 lacs,
Then used margin became: 55 lacs
and available margin became: 15 lacs.
And in this way there is no shortage of peak margin penalty.
Let say used margin: 50 lacs
Available margin: 20 lacs
Now some more f&o order is made(which is not executed) (for which 18 lacs margin is needed if executed), then zerodha kite app show as follows:
Used margin: 68 lacs
Available margin: 2 lacs
Now market became volatile little bit due to which there is increased of used margin by 5 lacs,
Then used margin becomes: 73 lacs
And available margin becomes: -3 lacs.
And in this way there is shortage of peak margin by 3 lacs.
In both the above situation margin available must be 15 lacs, but in 1st situation it’s 15 lacs and in 2nd situation it’s -3 lacs(because it’s also consider unexecuted transactions).
IS IT RIGHT WAY OF CALCULATION. AND HOW PEAK MARGIN CALCULATED IN BOTH SITUATIONS.
When an order is placed, the system will check if the user has an available free margin, if yes, the order will be placed successfully on the exchange and the required margin will be blocked from the available margin for all the open orders. Other orders can only be placed with the remaining free margin.
If margins are not blocked for the placed open order ( unexecuted orders), it will become a huge risk management issue here, as users can place multiple orders for which margin requirement can go above the available margin.
It’s means, clearing corporations have also a screen of individual clients just like broker have. And only difference is that, used margin of a client shown in broker screen both executed as well as non executed orders of f&o while clearing corporations shows only executed orders?
This can happen, exchange releases span 5 times during the day, what users see on terminal is based on 2.30 span but around 4 pm we update new span. Exchange send another span at around 6pm and margins are blocked according to that on console for next day. Difference we can notice if there is volatility in last 1 hour of market. So, always recommended to have at least 10% balance as free cash.
Why there is incorrect reporting done by Zerodha in Margin Statement to NSE?
Say I have funds of 74L in the account, entered few Futures NRML Long positions - Trading Terminal shows 31.79L in use and remaining 41.31L as free balance today and similar to this yesterday and day before yesterday too.
So assuming there is significant margin money freely available with Zerodha. But when I look at EOD Margin statement - this is what gets reported - which looks like Peak Margin Shortfall being reported ??
Please explain why the amount required by Zerodha is way too less for FN) - Only 3.14L and while exchange required is 33L ? Why wouldn’t Zerodha report the right margin’s which it shows deducted while trading
NSE F&O -314098.34 (Yes Negative)
Sub Total 7360128.46
Crystalized Obligations : 48570.0 (This is MTM - which will be deducted on T+1)