Some queries regarding the new margin rules

So I have some queries regarding the new margin rules. I did post these queries in an existing thread but got no response and the thread moved on without me. So please bear with me.

  1. Is the new margin framework like 20% Var+Elm for all intraday scrips or is it still gonna differ scrip wise with 20% being the minimum margin? Like it could be higher than 20% for certain scrips.

  2. From Dec 1st onwards, is EPI(early pay in function) available or not ? Like , can we sell our holdings and use the margin received immediately?

  3. How is this new margin framework going to change the pre-expiry margin reuirements for ITM options at Zerodha. I mean, is Zerodha still going take 50% of contract value on Wednesday and Thursday or is that gonna change to what the exchange has stipulated and 4 days prior to the expire, additional marigns would be required in an incremental manner.

That’s all for now I guess. Thanks in advance and tagging the man himself @nithin.

Minimum margin which has to be collected will be 20%. VAR and ELM margins vary from stock to stock.

EPI is available, you can sell your holdings and used the sale proceeds elsewhere just like you do now, no changes in this.

For ITM Long Options we already collect Physical Delivery margin in phased manner from expiry minus 4 days as stipulated by the exchange.

In the other thread that I posted, you said that Zerodha follows the system of collecting 50% of contract value on Wednesday and Thursday for ITM options.
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So, which one is it? Please clarify.

For ITM Long Options we collect Physical Delivery margins from expiry minus 4 days as stipulated by the exchange, as you can see above on E -1 Day ie. on Wednesday this margin is 70% of applicable VAR + ELM + ADHOC, instead of this we block 50% of the contract value which covers all the required margins.

But why? The exchange doesn’t require that you charge 50% of the contract value. Why burden the clients with excessive margins just for puny options?

what about 8 15 times in Cover orders? will it reduce?? @ShubhS9

Leverage offered in MIS and CO will be the same.

Also, from September 2021, the maximum leverage offered will be 5x in Equity and no intraday leverage in F&O. For more information you can read this post.

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With the new margin rules at the client level, do the brokers need to put up their own margins to enable the clients to trade, or is that obsolete now as every client manages his/her margin.

From September 2021, In Equity segment, brokers can offer maximum intraday leverage upto 5x, not more than this.

In F&O, brokers cannot offer any leverage will have to collect full SPAN + Exposure margins upfront.


As per the new margin rules, can we get max 50% margin by pledging shares/MFs/ETFs as we can get now?

The margin you get depends on the haircut value of the security you are pledging. You can check the haircut values for approved securities here.

Thank you… Sorry let me rephrase my question again, as of now, we can get a maximum 50% of margin by pledging stocks/MFs. Right?

How the new margin rules are affecting it?

No, it is not minimum 50%, as explained above, the margin you get depends on the haircut value of the security you are pledging, this varies for each security.

New margin rules don’t have any effect on collateral margin you receive for pledging securities.

For say if I require 100 rs as a margin to sell an Option so the minimum fund in my account should be 50 rs and the maximum 50 rs (50%) of the margin can be obtained by pledging stocks/mfs. That’s what I read in Varsity. Am I right ??

So now, are new margin rules affecting this margin obtained from pledging stocks/mfs?

This is right, for overnight F&O positions minimum 50% margin should come in cash or equivalent and remaining 50% can come from collateral margin.

Thank you … So now my question is upon implementation of new margin rules still I will be able to avail a maximum 50% margin benefits from pledging collaterals?

This doesn’t change, for overnight F&O positions, you will have to maintain a minimum 50% margin in cash or equivalent, and the remaining 50% can come from collateral margin.

Thank you… Can you please explain this part " * Interest of 0.05% per day on any debit balance"

If your account results in negative balance, there will be interest charged at 0.05% per day on that value.

So for this penalty, account balance should be closed and remain negative overnight or it will also applicable if it is negative at anytime of a trading day (even for the very short time)?