@vij @viswaram @Bhuvan @AkshayAtur Just want to confirm something
It says - exit your holdings and buyback the sold holdings on the same day, and if you had used the proceeds of the holdings sold to take another intraday trade, there could be a peak margin penalty on the intraday trade if you didn’t have sufficient funds available other than the credit from selling your holdings. So, ensure you avoid taking such trades,
Let’s say I have zero balance/funds in my account and I sell 100 shares from my holding from demat. As long as I don’t use selling credit for any other trades and just buyback the same holding - same qty- 100 shares - it will be just traded as intraday trade correct?- can there be any possibility of margin penalty in such case? I repeat I won’t use selling credit for anything other than squaring off(buy back same shares)
If you dont have balance in the account, you wont be able to take a short trade (selling first) even though you have holding balance.
Else you need to set up pledge for other holdings & utilize that margin to take a short position.
can you revise the scenario with a valid example, so that we can check the possibilities.
If you had balance in your account to compensate for any spike in volatility for the short sale you have taken. Then the peak margin penalty wont apply
As.
- you have sold your holding
- bought back the same qty end of day
- the margin/cash balance in your account is offsetting any volatility spike
End of day you made a profit your cash balance will go up, if you have made a loss it should be adjusted from the ledger or you may be asked to add funds.
If you haven’t used the proceeds for intraday trades and buy back the shares, there won’t be peak margin penalty. Also, you will not be able to buy all the shares sold, as you only receive 80% of the funds and don’t have any other funds in the account. The remaining 20% are blocked under delivery margin field for the day and will be available from the next day onwards.
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