Short Margin Penalty

F&O
63

the broker gives the email that so and so penalty is charged and refused to give the invoice ?
What should i understand this ?
Is this honest or something fishy?

64

You can complain to NSE.

65

If i threat the broker that if they dont give invoice then i will complain to nse . And if the broker then agrees to give me the invoice ; should i be get satisfied with it with the genuinness of the penalty ? Or is there anything more else , i should ask ?

66

This seems way too complicated to calculate, each time before taking a futures or short options position, especially when one does intraday and positional/delivery based trades in both cash market and derivatives market.

Even after moving to early pay-in system and blocking 20% of the funds from sold holdings, we still can’t take F&O positions on full margin shown in Kite dashboard, without having to do all these complex calculations each time before taking a trade?

Can’t the margin calculation be done on your end and a nudge alert be provided, that if I take the trade, margin penalty will be applicable?

It’s really unfortunate that on some days most of the profits are gone paying margin penalties. Please do something about this @nithin @mohitmehra

67

Nothing like that as I know, can you give me a example?

68

The post from @mohitmehra reads “The complete net credit from unsettled profits & trades has to remain excluded for margin reporting.”

“Credit from unsettled trades” implies, proceeds from selling holdings on T and T+1 day, right? Only on T+2, they are settled, right?

So from what I understand, if the margin available from Holdings that I sold today or yesterday is used to take F&O positions, it might result in a short-margin penalty?

69

No, did you face any? unless one sell holdings and intra trade fno and buy back the same holding, it should be fine. We show nudge also while buying back sold holding.

2 Likes
70

Thanks. Nice to know that

I did get a fairly high margin penalty. I’ve raised a ticket last evening. While waiting for a reply to the ticket, I’m just trying to guess what could be the reason for the penalty.

Would be nice if you guys could send an email or an SMS alerting clients when there is a margin penalty levied, and perhaps also briefly explain what caused the penalty. This would help us identify the mistake that led to the penalty being slapped and prevent it from happening again.

Just by chance, I stumbled upon the ledger entry regarding the short-margin penalty while trying to reconcile accounts.

71

Hi @ShubhS9 @siva @nithin
If i do square off my all positions within same time and because of my trade sequences my buying position square of first and than after selling position square off, meanwhile with 1.5 seconds i got mail from you guys that margin call.

Now my question do you guys charge me margin panelty after next 6 days or not?
Please respond me soon as possible

Thanks

1 Like
72

Clearing corporations take snapshots at 5 different times during the day to see if any customer is using excess margin or to determine peak margin penalty. If that snapshot was taken in that 1.5 seconds, only then clearing corps & hence exchanges charge a penalty. So the odds of this happening is very low if you are exiting it immediately, but there is a small little chance.

2 Likes
73

Thanks @nithin
So it doesn’t depend on your margin call email from zerodha but its all about snapshot timing
Am I right??

74

Yep, you are right. The penalty is charged by exchanges/CC, not us.