The risk has to go lower , as of now the perception of risk is higher. No one wants to buy at the tops.
A decent pullback of about 30-40% might reduce margins , but no one can say when that might happen.
Then you do understand how margins and risk work. Then why are you crying?.
Yeah right whatever. Thanks for the reply though.
@Avi_Garg I have experienced market manipulations myself and hence I will support SEBI if its actions are going to reduce it. Market fairness is my biggest concern.
@trader_dude I dont think SEBI is increasing margin requirements because the market is at a high. Maybe it is a smaller reason. It is trying to tame the manipulators with these new rules.
@Avi_Garg I think you should create a petition to SEBI chief on change.org or avaaz.org and provide the link here and other investor forums. Based on the validity and rationale of the contents of your petition, fellow traders might choose to support you and finally it gets delivered to the authority who are in position to decide.
If you decide to take this path, be sure to consider the point that while a trader must be allowed to make use of his funds without the fear and burden of unreasonable penalties; the rules on penalties must be such that irresponsible traders are not allowed to make the trust in financial markets collapse just because they took over leveraged positions that they do not have the capacity to honor at settlement.
Really, why should everyone suffer because of a handful people who don’t know how to trade responsibly? Lol there was this guy on Moneycontrol forums who said that he bought a 1480 CE Asian Paints one day before expiry. The stock was trading at a high already and it obviously corrected to 1450 and below. Now seriously why should SEBI protect this guy. You can’t. That’s how the market is. Someone has to make a loss and some will make a big loss and that is inevitable. And look at the way they are doing it. Penalties? Seriously? What’s to say people are not going to use all their funds and end up imposing penalties on them. Like what’s stopping them? Putting up a penalty like this is only a suggestion as to not using all your funds and it hurts the business of the market more than it provides any benefit because hey you can’t absolutely protect someone from loss in the market. Not even equity guarantees protection against loss. That’s how it is. But it hurts. It hurts because it restricts those who trade for a living. Leverage isn’t necessarily bad because with leverage I can get more for less which means diversification of my funds which by itself is a risk aversion strategy. And also when did it happen that we are informed of this stuff. Neither SEBI nor the exchange and nor the broker give us a direct message when these rules are put up. You have to find out on your own. I found out too late and paid heavy penalties. Like seriously, it’s ironic. Anyway, I can rant on and on and on about this. Hope everyone realizes what is happening is wrong and stands up against this.
@Avi_Garg Let’s have a hypothetical market scenario, where there are only two traders, you and me. You are the competent and responsible trader and I am the incompetent and irresponsible trader.
I take 10 times leveraged position using my one lakh and you are on the opposite side of position. The position goes against me, but I am neither made responsible to replenish my MTM loss nor penalized to wake up from sleep and act responsibly.
At settlement, you are making say 3 lakh of profit (being the competent trader) and I am incurring a loss of same amount. I in no way would be able to honor my settlement obligation because I have just one lakh in my pocket. Who would you hold responsible to receive your hard earned profit; me, broker, exchange or SEBI? Remember, I have just one lakh.
Here have another heart. Things are complicated indeed is all I can say.
Haha,
This rule has been under discussion for more than months before implement.
Z was sending emails and notice 1 month before.
I guess you were too busy making money.
I didn’t get any emails.
So, you are saying you did not get this important update from Zerodha?
only a few select customers got it?
If it’s May 29th then I must have missed it or ignored it or whatever. I was still new back then.
Wow. Frankly, I logged in after a month, for a 5 min break, from a tough problem I am onto, but got simply drawn towards the high emotions flowing in this thread.
@Avi_Garg - Sorry for your loss & those penalties mate. I see you defending your view quite passionately and vehemently. But unfortunately your logic is flawed. I thought @Anil30 did an excellent job by giving that hypothetical scenario and making it extremely simple to understand this complicated situation -
But you conveniently chose to ignore it. So I am going to give an even more crude analogy to help you understand. This is exactly what you are doing -
Scenario - You bought a new bike (your money in zerodha account) and went straight into a one way street (stock market) from the wrong side. The traffic hawaldar (SEBI) stops you.
Traffic Hawaldar - This is one way street. Here is your ticket. (Rs. 22000 Penalty)
Avi - No No No. This is my bike. (your money). I have got it from my hard earned money. I can turn it where ever I want. (exceeding your span+exposure)
Traffic Hawaldar - But this is a one way street sir. (new rules in effect)
Avi - No No No. This was a two way street before. How come it became a one-way street. I was never notified. (earlier there was no penalty)
Traffic Hawaldar - There is a huge sign (zerodha circular that you missed) right at the beginning of the street from where you entered informing it is a one-way street.
Avi - Why you have to make a two way street a one way street (unable to accept change in rules). You know how much pain it causes to common people (retail investors)?
Traffic Hawaldar - Sir, we did this for your own safety to avoid traffic congestions and accidents. (excessive speculations, operators play, stock manipulation)
Avi - But how it is in my interest if I have to pay the ticket (penalty) for it?
Traffic Hawaldar - Sir, it is to safeguard common people from people like you. (since you are part of excessive speculative activity when you go beyond the money you have in account)
Hope it hits home.
Though it happens. I have made many such mistakes. Guess you are relatively new …
Anyhow, I see a lot of people advising you to go for change.org. My sincere advice - Don’t. You won’t get the numbers. And this is like - karle karle karle karle … On a lighter note … for reference - https://youtu.be/I6ES6opeHYI?t=3m20s
Cheers … getting back to quants … 
I can see your point, though I did get what Anil was trying to say. Anyway, I care about my money and because of the new rules my volume has come down. Now one reddening factor is the extended trading hours purposed by SEBI which would mean I can trade more in a day and make more money hopefully. What do you have to say about that? What’s gonna happen?
Great … Happy to help … 
You have to accept the new rules and change with it. The sooner the better. Check this book - “Who Moved My Cheese?”. Will change your perspective for there are bigger rewards/opportunities when things change for the better.
If you are getting my point, not today, but slowly it will dawn on you that - it doesn’t matter. The way I see it, trading is personal and that is why it cannot be taught. (1)Having capital and (2)knowing yourself is a better approach to making money than following stock market, opinions, rules, news, etc.
Now, contrary to what many people think here - You have capital. You told your story 7 days ago and the rule was applied on 2-Jul-2018 implying you accumulated those penalties within max. of 17 working days without a margin call square off. That means this loss was not more than 20% of your capital. A simple back calculation of a 0.5% penalty per day will show -
((22000*100)/0.5)/17 = Rs. 258823.52
That you held on to this loss/shortfall on a per day M2M basis of Rs. 2.5L on an average if not in one shot. So my guesstimate is you are certainly not playing with 1L and have enough capital to survive and mould yourself according to the changes.
On the 2nd note, I liked the fact that you want to optimise the idle money. Nothing wrong with it. If it works for you - it works for you. If taking leverage and managing risk works for you, its brilliant. You certainly have more opportunities with extended trading hours and leverage can work longer for you. So if you see it right … and change quickly … things will favour you.
Have a good one …
@Avi_Garg what is the exact entry in ledger showing this penalty. I just want to check in my ledger also. So far I didnt find could you please give exact entry text by masking numbers
Anu
Just had one today. This is how it looks -
The interesting thing is it is debited one week down the line for shortfall a week ago. I am still trying to make sense out of it but the numbers are not adding up. Also, it seems MWPL greatly affects this. So even if you are cash positive @ 3:30 PM you maybe cash negative for overnight due to increase in MWPL in positions you are holding and hence additional exposure requirement.
I was actually trying to find a mechanism to assess this margin increase that may be charged next day and keep spare cash accordingly … but its really hard since MWPL takes effect after market hours. And numbers are not adding up …
Maybe someone from Zerodha … can throw light … @siva … The right question is - if @ 3:30 PM you are Free Cash positive and after MWPL you go negative - are you penalised for that night?
No, no penalty for that day, from next day that would be applicable.
This is really odd then. Even if this is a 1% penalty, you mean to say that I was in a shortfall of Rs. 701721. I am pretty sure that has never happened. When I am Done For Day @ 3:30 PM, I always have positive margin available. I thought MWPL could explain it but it certainly doesn’t seem to be the case. Is it possible that for a brief period of time the Zerodha system allowed me to take extra leverage only to settle it right in ledger later? Also, is there something special happening on expiry? Sorry but the numbers don’t add up …
I will anyway take this offline and raise a ticket with support. Thanks.
But keep us posted!: 
Sure … Actually got a quick reply. Hats off to Sharmila from Zerodha Support. Here it is -
Thank you for writing to Zerodha.
On 27.07.2018 you had a balance of Rs. XXX credit balance. You shouldn’t consider the obligation credit of 26.07.2018 as the settlement for FNO is T+1. The span required is Rs.AAA + Exposure required is Rs.BBB = Total Margin required Rs.CCC - balance available Rs.XXX = Rs.118936.21 was the shortfall.
On the short fall you have been charged 5% =Rs.5946.81+18% GST = Rs.7016. Hope this gives you the information required.
Team Zerodha
Sharmila Gupta
Take Away -
So it does make sense and Ms. Sharmila certainly managed to answer with numbers finally adding up. Gonna have a good long sleep over the weekend now.
Hope this helps others figure out their penalised ledger better.
Cheers!
