That is the key here. The dilemma is whether we can sign the form and go ahead even if we have any form of exposure. How loose is the term for interpretation? Do stocks count - as they are affected by USDINR prices after all (particularly exporting businesses). Does property count?
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circuits were revised at very quick intervals. An option contract which had near 0.8 as upper circuit at open now has 4.985 with a day high made at 4.08!!
Hi,
Clarifying this. Are your stocks in USD? How about property?
The circular says contracted underlying exposure which is defined as by RBI as: An exposure to the exchange rate of Rupee against a foreign currency on account of current and capital account transactions permissible under FEMA, 1999 or any rules or regulations made thereunder, which have already been entered into.
May 82.75 PE went to 21, whatās the use of circuit limit then?
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I also have same question. I have a ESOP from US company and it is in USD. Is this good enough as exposure ?
Your company receives payments in foreign currency. But do you get payments in USD? That would be the decider question here. Also, you can ask your bank the same question as they would be aware of the day to day nuances of FEMA because they deal with this hundreds of times every day. I am doing the same too
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When you are selling a call, what are you hedging exactly? Do you have USD inflows?
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Very unfair here. All sellers of 82.75PE wouldve had liquidations by Zerodha. Coz, its impossible to satisfy such increased margin requirements.
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Yes USD Inflows from my son who is an NRIā¦ hedging against drop in USD to INR
Not sure what youāre hinting, cos we havenāt resorted to closing positions for anyone yet. Clients may be liquidating positions on their own.
Venu, The option price went from 0.095 to 21, shouldāt this much volatality be restricted by circuit limits? Iām sure many people would have exited at huge losses just by seeing their MTM loss
My apologies then! Good to know a well learned broker like Zerodha is giving a chance to clients to sq off on their own terms (in a way)! Thanks.
@VenuMadhav @Sensibull
Can we buy US stocks or mutual funds who have exposure to those and then pledge them to zerodha will we be eligible then to trade this segment
The RBI circular states that any positions after 5.4.24 shall require underlying exposure, but there is no clarity on positions taken before 5.4.24.
Hence, compulsory square off should be decided only after consultation with brokers association, RBI and SEBI.
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You could have used nudge feature in kite to convey this confusion and awaiting clarification thing when someone opened fresh positions after circular was out
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You donāt need to pledge right. Just have to provide declaration, and then need to proof only if/when asked later
Lol. Not sure if youāre joking but yeah good strategy lol.
I buy domains in USD once a year so am hedging against that hehehe
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So unless I, personally, am getting USD or GBP, I cannot fill and trade in currency anymore, even if I hold 50% in partnership firm.
But is it legal or not and what about position I can just buy 10 shares of apple or 1000 rupees worth of MF who have exposure to foreign stocks will I then be able to trade let say 30L capital
Yesterday I created some positions and there were no warnings or restrictions. Today suddenly I am receiving message that I have to square off by tomorrow. What changed in one day?
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