On Friday (27/11) I faced this issue on Zerodha . I had enough capital to create an option spread position which could only use less than 40K and I had enough margin for the same by squaring off other positions. But Zerodha didn’t allow and kept saying I need more margin money . Not sure what went wrong.
@nithin @ShubhS9 Do You think When This Peak margin Is fully implemented Then There Will Be Good Volume and Boom in Equity options segment
@ShubhS9 @nithin Sirs i usually do place 10-15 orders of nifty, which could be either buy or sell . How would the new rules impact me… In last trading sessions i saw i was debarred from short selling nifty though i had no open positions and plenty of margin in cash… IN few minutes i was allowed again. Plz help?
Once you square-off your position the same margin can be used to trade again. So if you have adequate margins there should be no issues.
Maybe you had open pending orders which were blocking margins, hence your order might be getting rejected, or you might be placing order outside F&O execution range, you can learn more here.
1 Like
can i sell equity from holding and use the money to buy NRML call options for intraday and then exit my equity short position by EOD ?
You can do this, but it is best not to use sale proceeds received from selling holdings to trade intraday if you want to buy back the shares at end of the day, if these are the only funds in your account, doing so can result in peak margin penalty. Everything has been explained in detail here, please read it.
@ShubhS9 @nithin By Aug 2021 Zerodha Is Trying To introduce Margin Funding Can You Explain The Mechanism Of Margin Funding
-
If I don’t have funds other than selling holdings,
a) Can I buy back the same stock in CNC ?
b) Can I do day trading on the same stock ?
c) Only 80% funds available for intraday also ? -
How much peak margin penalty ?
You can buy back but only 80% of the shares.
Yes, you can trade.
When you sell shares from your holdings, only 80% will be available for trading on same day, remaining 20% will be credited the next day.
But earlier we all were told that 100% of the proceeds from selling holdings in demat can be used to take whatever positions we want. But now it is being said that only 80% of the proceeds can be used. Shouldn’t the shares given through EPI constitute as 100% margin?
2 Likes
Hi,
As you explained in one of your Topic titled " Always First Exit High Risk Positions" where you clearly mentioned how buying a option can be used to offset the risk hence reducing the margin drastically.
Now as a Intraday Trader, why Zerodha doesn’t consider allowing " All strikes In Banknifty options" as allowed in nifty?? Idea is If am Allowed to Buy current month Deep OTM CE and PE, as a Intraday Trader I can get some margin benefit as positions are already hedged. The strikes which are allowed as of now, command so Higher premium that its not practically nonviable to do so. Please have a look at it!!!
As explained in the above mentioned article:
The reason for this is because 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 CC(Early payin or EPI), which typically will happen only after the market closes on a trading day.
1 Like
Also, it’s not mentioned in the article so that’s why I am asking. If one is doing intraday only, then what? Let’s just say that one bought 100 shares of ABC and closed the position on the same day, then can 100% of the proceeds be used or only 80%. Of course, I am aware that profits settle only on T+2 day. I am asking if we can use 100% of the principle or not?
1 dout am using Zerodha is this restriction also for Zerodha
This restriction of blocking 20% margin in only for stocks sold from your holdings, if you are buying and selling on the same day, once you square-off your position you can use 100% of the principle to take other trades.
1 Like
this new rules is also for Zerodha users ??? am using Zerodha and I do only cns
The new rules apply for everyone.
please tell in Zerodha there is no leverage for cns so this new rules also for Zerodha users
Yes, from your selling (T1 or demat) holdings you can use only 80% on that day, remaining 20% available on the next day. For full details read article.
oh okok thanks