If I hold the shares and pledge those , Would that amount be considered in these peak margin requirements ?
Till now, we needed to maintain 40% of proceeds from selling CNCs on T+1 day and this was checked at the end of the day. Now do we need to maintain this 40% throughout the day OR that condition of “only 80% credit available from selling CNCs for the same day” will totally replace the previous 40% rule ?
If your margin was negative overnight, then this will be considered as margin shortfall by the exchange like they normally do.
Clearing Corporation will take 4 snapshots of client positions at random times during the day and see if there was sufficient margin available with the broker at that time. So, this can be anytime and if there is shortfall there will be peak margin penalty.
Rather than holding your position through negative balance, it is better to add funds or square-off.
For taking Long Option position you do not need margins, you only pay the full premium upfront.
Even when you want to exit your position, there is no need of additional margins.
As you want to hold your position until expiry, exchange blocks Physical Delivery margins from expiry minus 4 days, at this time you will need margins to hold your position. You can learn more on this here.
Yes, you can use the margin received from pledged shares as margin just like you currently do, no changes.
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Why traders have to pay the panalty? It should be on broker who is providing leverage right? If broker restricts on how he provides leverage , everyone should be good right?
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what is the panalty amount?
this rules for F&O this rules is also for equity
this rules is also for equity
New rules apply for both F&O and Equity segment. Would request you to read this post to get clear idea.
for what reson 20% amount is blocked while seling the share
am using my ammouy for buying and seling the shares then for what reson 20% of amount is blocked for 1 day why
I dindnt undestand pl explain am using my cash to buy and sell a share then why 20% amount is blocked for what reson
This is due to Peak Margin reporting, we are now required to block 20% of selling credit as margin until we can debit the shares from your Demat and make it available to the Clearing Corporation (Early payin or EPI), which typically will happen only after the market closes on a trading day.
When you sell holdings you will receive only 80% of the sale value, if there is no other cash available in your account but only this then you will only be able to buy back 80% of the shares, if you add funds then you will be able to buy back 100% of the shares sold.
You can use the funds you have to take multiple trades, no issues.
@ShubhS9 hai any thing will affect the positional traders in option segment in hedging and selling option
this 20% blocking margin is for all the brockers or some limited brockers
The margin requirment for overnight positions is going to remain the same, also you will continue to get margin benefit for hedged positions as well. No changes to this.
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This is for all the brokers.
Any update on this?
Brokers will collect the minimum required margins, but margins are dynamic and change based on volatility and price, so if margin requirement changes and you don’t have sufficient funds to cover change in margin requirement, then the shortfall penalty has to be paid by the client.
The penalty is same as the exchange charges for shortfall in margin for overnight positions, you can know more here.