Peak margin, Intraday leverages, & 2nd order effects - Dec 1st 2020

If you have any queries, do post below.

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will my margin after selling options be block for entire day even after i square off as suggested by IIFL?

Can you read the post first?

Also, one of the brokerage firms as part of their policy has decided to not allow multiple intraday trades with the same margin for whatever internal technological limitations. This news has been creating chaos on social media. There is no such issue at Zerodha. You can trade multiple intraday trades with your free cash and from margin available by exiting existing positions and holdings.

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Hi

Thank you for the detailed explanation

Is it possible to quantify the impact on the margin requirement for CO trades, if any.

Will you start permitting BO trades again soon?

Thanks

The maximum leverage will be equal to this:

  • Dec 2020 to Feb 2021 — penalty if margin blocked is less than 25% of the minimum 20% of trade value (VAR+ELM) for stocks or SPAN+Exposure for F&O.
  • March 2021 to May 2021 — penalty if margin blocked less than 50% of the minimum margin required.
  • June 2021 to Aug 2021 — penalty if margin blocked less than 75% of the minimum margin required.
  • From Sept 2021 — penalty if margin blocked less than 100% of the minimum margin required.

Here is the VAR+ELM for stocks and SPAN+Exposure for F&O.

I am an intraday trader and getting 10X exposure in reliance will it affect on my trading?

Say iam trading intraday nifty straddle (mis) regular order will there be any changes to it

As the margin requirements increase and the leverage offered comes down, it will reduce your purchasing power.

Any Idea how much exposure will get in MIS intraday in reliance?

No changes if you take Long Option position as you already pay premium upfront. For Short positions margin requirements are going to increase in phased manner, so as margins increase the leverage offered decreases. Also, from September 2021, there will be no intraday leverage offered in F&O, you will need full SPAN + Exposure margin.

Sir, after september 2021 , do we need additional margin for buying the naked options ( specifically CE) Or do we will be just needing the amount of premium paid.

No additional margins for buying Options, you only need to pay the premium.

Hello

I dont trade in Futures & Options, neither i take margin.
so my question is:-
i have 100 reliance at Rs.1000 in demat with no cash extra available .
a.) when i sell all my 100 shares of Reliance and i get 1lakh after selling, so can i buy bajaj finance for remaining 1lakh in delivery ?
b.) If i will be able to buy only for 80k then will i be able to see 20k also in my cash balance or i will only be able to see it net day ??

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When you sell shares worth 1 lakhs, you will only get 80% ie. 80k back, this you can use to purchase other stocks.

You will be able to see 20k the next day.

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Shubh, for option selling since Zerodha was already offering limited leverage of 4 times in FnO, there is not going to be any change from tomorrow right? No impact till March.

Right, things remain the same till March.

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I do not have any cash Balance.

All I have is a very high Margin from stocks and Liquidbees (50% each ) to avoid interest.

If I sell a stock Option, I get credit to say Rs.10,000. I will use this Credit to Buy Put option( Same or Diff stock /Index) on the same day, lets say I buy a Put for Rs. 9000/- on the same day.

Please confirm the following. I only take Positional trades usually monthly expiry and not intraday.

From Dec 1st, 2020

  1. I can only use 80% of Rs.10,000 for buying put? in the above example, i need to have a minimum of Rs1000 to buy put of 9000Rs?
  2. Please confirm this is possible even from tomorrow, In case if it is possible with penalties what is the penalty amount??
  3. Do I need to have 9000Rs cash compulsory even after getting credit of 10,000 from sold put?

Thanks

From December - February: Max leverage of 5% or 20 times for stocks.
From March - May: Max leverage of 10% or 10 times for stocks.
From June - August: Max leverage of 15% or around 7 times for stocks.
From September 2021: Max leverage of 20% or 5 times for stocks.

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a.) so i need to start tracking rest 20% so that there is no error ?

b.) Also if for rest 80k if i buy hdfc in delivery (cnc) but sell same day ( not futures or f&o) and then buyback my sold Reliance, will there be penalty ?

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You can use 100% of the premium received to purchase Options in the same segment, for all other trades you can use it from the next day.