how it will affect the index option selling? now we need 30-35 thousand to sell one banknifty options in intraday. will it be higher by dec
There will be no changes to NRML margin.
Explained in detail above, please read the main post.
SEBI decision to introduce new margin reqd is absolutely wrong. you brokers are not objecting at all. This is looking strange. When nifty is at peak and trading at 52 weeeks high, to buy trade i dont understand margin is reqd at all. Margin risk increases only when they buy more than 1 quantity. Till 1 future buy margin should be allowed with stop loss. small traders trade with 1 lot. more than 1 lot margin can be increased. to keep one 1 lot in future why mis is not been allowed by sebi. SEBI always helping big investors to make money by increasing margins in the name oif security for all. requesting zerodha to talk in favour of small traders for mis margin if they trade only in 1 lot. more than 1 lot let them increase. one more thing when india vix is stable where is the risk in trading at all. Stocks can crash only when it trades below PML level. When the stocks are trading above PMH level where is the rik sebi sees to increase margin i dont understand.
Will this impact expiry day option writing? Already margins are very high on options writing. Are they going to increase further? On the expiry day, we have just a day and collecting full margins is insane. To earn rs 250, depositing 1.5lac call writing margins is not profitable for traders.
Also, I read that SEBI relaxed some margin rules.
For example, equitas holding had 20% UC and then it was put in ASM for no reasons. Now, intraday leverage is zero and to add insult to injury we can’t buy the stocks if we have sold from holdings. We can’t even short equitas now. This ASM rule is difficult to understand and it kills liquidity in the stock. Can you help the new changes where SEBI has relaxed on 26 Nov 2020.
One more question, if I pledge stocks worth 1 lac, what margins will I get? What are the charges. Can I take delivery using pledge margin?
Margins requirement will increase if you are using MIS, no changes in margin if you are using NRML.
This has been explained here.
This depends on Haircut of the security. You cannot use collateral margin for taking delivery of stocks.
What’s the logic of having same margin requirement for weekly options which I’m going to hold for a week and weekly options which I’m going to square off the same day? Clearly the first one is riskier.
Can you release a provisional calculator / simulator based on the new margin rules? I simply want to know this - Today I can sell one Nifty Iron Condor for 40-50K. Is this going to increase? I know it changes every day based on Nifty level, volatility, exact strike prices in the strategy, days to expiry etc. but if these things remain same, would the amount blocked per 1 Iron Condor lot increase? I don’t care about intraday, I am only interested in knowing impact on hedged positions that I can carry for days.
Also, I sometimes get a margin call mail from Zerodha when I do “exit all at market price”. I suspect if the hedge gets exited before the short position, the margin requirement goes up momentarily. So far, I have not been charged any penalty for this, would this change under new regulations given that brokers would be required to maintain margins on a real-time basis and not end of day basis?
Again, please provide a calculator / simulator. Excel sheet will also do.
No changes for you.
Right, exiting also should be in order now, 1st should go for closing non hedged legs ie shorts and then close longs.
No, they are trying to save small investors but the rules are stricter than required because of few bad brokers, imagine someone giving out 300 to 400 times leverage in eq and upto 100 times leverage in fno, and selling it as feature, it is systemic risk for entire industry. In order to control that maniac SEBI has to come out with these kind of stricter restrictions.
Anyhow see Nithin’s take below.
All I (maybe we) ask you after the deadline please don’t reduce a single bp from the equity intraday margin level of 20% (5x) level, at least on nifty 50 stock.
Yes, we can understand that some brokers became bankrupt and some defaulted as well, but this decision is too much. Small Intraday Scalper like us have to leave the market now and have to find a new job. 3 years in Indian Market. It was good and earned a lot but now it has come to an end. CO and BO were always my favourite provided by Zerodha. Learned everything from Varsity. SEBI has gone crazy in past couple of years. The market will be destroyed by operators and institutional investors now. Retail Trader will die absurdly. #zerodha #stocks
Yeah min 20 times we will offer on nifty 50 after sep 2021.
with this finally, now soon I will add into millions who are unemployed. and I am worried about it.
until they should drastically reduce lot size. which I see a distant dream.
actually, regulator and govt working in opp direction, regulator looking to reduce risk while govt want and encourage risk-taker and generation employment, and @ last it leaves millions of frustrated unemployed youth. and industry HR guys will say these are unqualified as per industry requirement.
@nithin @siva any impact due to all this will be clear from the decrease in volumes on Dec 1. As a broker, you will have a much better idea of how adverse it has been for you as a broker. For example the no. of clients logging in to place trades, the drop in brokerage revenue etc. Please keep us updated on how the landscape will change.
regulator looking to reduce risk while govt want and encourage risk-taker and generation employment
With due respect to trading (being a non-fulltime trader myself), trading is a zero-sum game. What takes economies ahead is innovation and enterprise. Risk taking in market is like risk taking in a fight - the better fighter wins but other is hurt. So net benefit is zero. This is not what any government wants. Government wants youth to take risk in creating win-win opportunities.
so from 1st Sept 2021 for shares, i would need full margin which is currently approx 20% of total traded value. so 1 lakh intra day trade, margin 20k so i would need full 20k to do intra day from 1sept ?
from 1st Dec it would be 25% of margin required, which in this case 25% of 20k which is 4k right ?
can i still do the buy of 1 lakh, sell it, again buy 1 lakh of same share or another sell it again buy 3-4-5 times while keeping my account balance same as 20k ? or once margin is used then i can’t use it again for that day and need new margin for another transaction (even though i have squared off the prev buy transaction)
25% of VAR + ELM for Equity and SPAN + Exposure margin for F&O, which varies from stock to stock.
You can use the same margin for multiple trades.