We as Zerodha can build this out fast, but the entire broking community in India will have to build this. It will all take time. But this is a good start, eventually I think the margins will go much lower.
I’m sure there’s lot of expectations @nithin
Please do the best for your trading family.
As long as the broker system is not impacted by risk, it should be win-win.
@the_rock, @HSL and all others who are in favour of below:
I have no clue how experience TRADER you are.
As in OPTION Strategy we have to adjust our position you can’t Mandatory to Exit one of the above condition suggest by you.
when the new margin system implemented , with in 3 to 4 month we can see a good liquidity improvement in all f&o stocks , liquidity will improve in fast manner in indian market , like USA you can find enough volume in all option contract , even next month and far month ,
Its really a good move , but india is too late to follow the developed market
any way happy to see the indian market with new margin system
This kind of rules is very good for brokers , traders and government
No more UNLIMTED LOSS
@nithin what about margins for trades in Future contracts(esp intraday)?
Margins won’t change for naked positions, it may go up slightly. This intraday leverage issue is a separate one, we need to wait and watch if regulators will allow it to to be continued or it will be stopped.
Check this thread
So we have this technology that know we have two options for risk exposure? This is cool!
@nithin, any particular reason for this? I know they carry unlimited risks but depending on your strategy, naked options/futures aren’t a bad thing. Margins have in any case increased a lot in the last few years. At least, I hope that the margins for far OTM options will remain untouched.
@nithin interesting… so with the short option minimum reducing, far OTM options should need lesser margins too I am assuming.
I believe they want to keep the margins similar to existing for naked but want to reduce for hedged positions. OTM may reduce a bit, I think.
@siva @nithin sir has the date for implementation of margin circular changed from 17th febto 1 st April as suggested by business line?
17 feb is for starting reporting of “peak margin”
1 April is for penalties on the violation.
If confused - I have one word -
According to an article published in Business line the upfront margin collection from broker is extended till 1st April
Hedge fund: Hedged trades may cost less as Sebi likely to lower margin requirements - The Economic Times https://m.economictimes.com/markets/stocks/news/hedged-trades-may-cost-less-as-sebi-likely-to-lower-margin-requirements/articleshow/73287285.cms
This is it!!!
Too many things happening at the same time.
What is moved to April1st is upfront collection of margins for cash/equity trades. Until now there was no requirement, from April 1st it starts for cash markets similar to F&O.
While exposure margin will reduce, the PSR will be moved to 6 sigma. This will mean more SPAN margin, so the reduction in exposure margin will be made up by increase in SPAN. So the future SPAN+Exposure might be slightly more than current SPAN+Exposure for naked positions. But for hedged ones, the future proposed will be most likely 65%+ lesser.
@nithin any update regarding relaxation in f/o intraday leverage?
Nopes, will take another 3 to 4 weeks to know exactly what will happen.
But why is it being moved to 6 sigma?