Peak margin requirements from Dec 1st 2020 & its effects

[Avi_Garg]

Welcome to the club.

[VijayMadhu]

Dear Nithin, (@nithin)
Please write to Finance Ministry of Govt. Of India and appeal for withdrawal of this circular.

Points to mention:
Negative impact of this sebi move-

1. Lower tax collection for the government
2. Lower liquidity which leads to greater risk of market crashes
3. Forcing traders to move to option buying which is a gamble
4. Against free trade concept
5. Will cause unemployment for several brokers and their employees
6. Problems created for foreign investors who now need to maintain more margin since their funds are with custodian.

Solution

1. Intraday margin should be fixed at 10x and penalty levied on brokers for providing more.
2. Broker to provide funds for providing leverage.

Please write to finance ministry. And also include major banks in cc like JPMORGAN, Deutsche Bank, etc. They had raised an issue with sebi regarding peak margin.

An email from you will hold a lot of weightage.

[Lokesh_Pancholi]

Is there any chance that this circular gets withdrawn in the near time? Aren’t brokers opposing this circular as this will reduce their revenues also

[Atreya_C]

Have question for guys here who are option writers. What is a safe number of lots for selling banknifty/nifty ATM options in zerodha? Do we face any liquidity issues/major slippages if working with, say around 8-10 lots?

[Gaurav2k]

There are no liquidity issues/major slippages on selling banknifty/nifty ATM options, they are always liquid with huge volume. You can easily trade 8 to 10 lots!

[Atreya_C]

Thanks a ton!

[Jay_Surana]

Following peak margin requirements from december 1st, what happens in case of BTST?
upfront margin of 20% is to be maintained at zerodha while buying today and selling tomorrow? If no, margin penalty is applicable in case of non maintenance of upfront margin as mandated ?

[ShubhS9]

@Jay_Surana

Following peak margin requirements from december 1st, what happens in case of BTST?

You can continue to do BTST, no changes.

@Jay_Surana

upfront margin of 20% is to be maintained at zerodha while buying today and selling tomorrow?

You already pay 100% of the value upfront when you buy stock for delivery, so you don’t have to maintain anything extra, also to sell the same next day you don’t have to maintain any additional margin.

For better understanding would request you to read this post.

Changes in margin requirements from 1st Sep, 2020

Under the new margin requirements, a minimum of 20% is required to buy a stock and to sell a stock. The margin for selling a stock is exempt if the broker can make an early payin to the exchange - which is debit shares from client demat and give to exchange/clearing corp on same day. In case of BTST, the shares are still not credited to your demat, which means we can’t make an early payin. Which means we need to collect 20% for that sell transaction. When buying a stock we would have collected…

[Gopinath_Pb]

bhai, small ivestors trade in 1 lot future. if the increase the margin for 1 lot only trading how small investors will trade. For more than 1 lot let them do any thing. For just 1 lot of trading if they increase the margin to 3 lakh per future stopping mis will it not help big bees. always small investors are in terriible loss bhaiya. We trade only in 1 lot. so mis should be allowed for 1 lot. i hope u understand. all bad brokers problem are different they misuse in 100 lots like that. small traders who trade in 1 lot do not have money at all i lost 25 lakhs to this market in intraday trading. I am hoping i will recover some money from this market so i am trading. I need small margin to trade in 1 lot. so for 1 lot mis should be allowed. existing system should continue. in the name of small investor saving they are screwing the people from trading it self even in 1 lot. option sellers only make money. i cant sell options because of margin. so i buy option and aLL OPTION GOES TO ZERO BHAI.

[JohnnyCage]

According to new SEBI regulations. What amount of funds must be needed in demat before buying on 10x leverage.

[ShubhS9]

@JohnnyCage

According to new SEBI regulations. What amount of funds must be needed in demat before buying on 10x leverage.

From September 2021, maximum intraday leverage which can be provided in Equity segment will be 5x and there will be no intraday leverage in F&O segment, margin requirements will be same for intraday and overnight positions.

[JohnnyCage]

What changes will be there for intraday margin traders (equity). What should be the more point of concern for the traders who used to trade with up to 10x leverage?

[ShubhS9]

@JohnnyCage

What changes will be there for intraday margin traders (equity). What should be the more point of concern for the traders who used to trade with up to 10x leverage?

With 10x leverage, if you have 10k in your account your purchasing power becomes 100k, with 5x leverage it comes down to 50k, so you will have to adjust accordingly.

[parimal_shaha]

So after all this explanation summary is after Sept 2021 NRML margin and MIS margin will be same…no difference…

[oks_omkar]

@ShubhS9 @nithin ???

[Avi_Garg]

@oks_omkar

@ShubhS9 @nithin ???

Need clarity on this.

[maddy_Des]

@siva @shubhS9 @nithin

Really need a clarity on this asap.
Different brokers giving out different interpretations.

[siva]

@maddy_Des

Really need a clarity on this asap.
Different brokers giving out different interpretations.

To be frank no one knows the exact thing, still everyone is interpreting the changes in their own way, hopefully in next days we get some clarity.

[siva]

@Avi_Garg

Need clarity on this.

Can you give source link?

[siva]

@Avi_Garg

But if it’s different for every scrip with 20% being the minimum and upto whatever I don’t know, then there’s a problem.

What kind of problem?