Update 4th Aug 2020 - Margins for trading stocks & Intraday leverages

[nithin]

@Lax

Thanks Nithin. How this amount (Profit from intra day trade, sell from T1 stocks) will be visible on Kite. How interface will look like? When 40% margin from T1 stocks will be released. Will it be next day or T+2 days form when it is sold.
Well I can try some trades to understand all scenarios but not sure if it be right thing to do.
Can you please create a topic and explain them with examples as I see many people have requested it.

Can you post the question on the other thread that I linked.

[nithin]

@Vivek_1

I moved to Zerodha, to avoid brokerages, but now, the savings in brokerages, I am paying it in penalties

The penalties were mostly because we used to give an option to customer to decide if he/she wants to use proceeds from intraday profits or exiting positions to be used immediately. In the new mechanism, the broker has to stop that option, which means the penalties will stop.

[nithin]

@aztrader2020

1)if i trade in index options intraday MIS.For example say i have margin available 20k in my account and i buy banknifty weekly expiry call 9:20 am at strike price (25(1lot) * 500)=12500 and if it goes in the money (25(1lot)*525= 13125) and now i want to exit the position at 10:00 am same day,do i need additional 13125 in my account to exit that position?or index options remain unchanged (as there is no leverage in that )

2.plz provide a link where in i can see the margin requirements for different segments.

1. hmm… No, you don’t need money to exit your positions. I had advise you to first read up on options before trading in them.

Home – Varsity by Zerodha

2. To buy an option you don’t need margin, you just need full premium value. Margin is required for futures and shorting options, which you can see on span calculator.

[Vivek_1]

There are situations, where, I was within, 1% and less than 1Lakh marign shortfall, but was charged the highest penalty on the first day it self. One of the funny situation was I had a short fall of few hundred rupees, but got a penalty levied in more than thousand rupees

[Suryakant_Mudke]

if i bought 1 lakh worth of reliance today and on next day i.e T+1 day i got 5000 profit and i sold it …then can i use that 1lakh and 5 thousand rupees on that day (T+1day).

also do i need to have margin while selling that shares on T+1 day

please help

[siva]

@Suryakant_Mudke

if i bought 1 lakh worth of reliance today and on next day i.e T+1 day i got 5000 profit and i sold it …then can i use that 1lakh and 5 thousand rupees on that day (T+1day).

also do i need to have margin while selling that shares on T+1 day

Please post here.

Changes in margin requirements from 1st Sep, 2020

Check a summary of the changes in the below table: Action Till 31st August From 1st September Stocks sold from demat holdings Can use proceeds to buy other stocks or trade in F&O No change since we debit stocks the same day and give them to the exchange under the early pay-in mechanism Stocks sold from T1 holdings (i.e. BTST) Can use proceeds to buy other stocks or trade in F&O Can use the entire proceeds to buy other stocks and 60% of the proceeds to trade in F&O Intraday profits …

[vmm]

@siva : By when can we expect additional list of shares to be made available for margin pledging.

[siva]

@vmm

By when can we expect additional list of shares to be made available for margin pledging.

By this weekend.

[harry_pot]

hello sir
why sebi need such changes and what will impact of such changes on small traders like us ? is short is it good or bad?

[Gaurav_Khurana1]

But assume you sell 100 shares of Reliance at 10.00 AM and then decide to buy back the same stock at 11 AM. The issue now is that at the end of the day, there will be no stock for EPI as this becomes an intraday trade. While there is no position at the end of the day for margin reporting, at 10 AM you would have 100 shares of Reliance short which would require a margin of around Rs 40,000 (20% of 100 x 2000) in the peak margin reporting regime. Since this Rs 40,000 isn’t available as margin, this would entail an upfront margin penalty from Dec 1st 2020

Hi,

Im bit confused here. How would you differentiate between intraday shorting and someone selling holdings? And if you can differentiate why sebi is asking to collect margins for selling holding. And i hope this doesn’t mean any sort of ban on intraday shorting.

[nithin]

@Gaurav_Khurana1

Im bit confused here. How would you differentiate between intraday shorting and someone selling holdings? And if you can differentiate why sebi is asking to collect margins for selling holding. And i hope this doesn’t mean any sort of ban on intraday shorting.

This issue will only arise once peak margin reporting starts from Dec 1st. We are in the middle of too many changes already :). We will update here more on this once there is clarity. But yeah the way the rule stands today, from Dec 1st, if you sell your stock holdings and you want to buy back intraday, for buying back you will need the 20% margin.

[Anmol_Agrawal1]

@siva when will various mutual funds & etfs which are now eligible for margin pledging in the the updated list available for pledge. I can see various funds available https://docs.google.com/spreadsheets/d/1vRI4NKpJ-3mnOWxUhSRMSQD5txy8QNumzSQrdfGKyL0/edit#gid=0

[nithin]

@Anmol_Agrawal1

when will various mutual funds & etfs which are now eligible for margin pledging in the the updated list available for pledge. I can see various funds available Approved list of Securities at Zerodha. - Google Sheets

Give us a few more days for the chaos to settle down, we will update here.

[jonu_dsa]

Good evening Nithin.

Had Some Concern Regarding New SEBI rules effective From 1st September 2020.

Do I Need To Maintain Cash Margin i.e: 20% For Buying & Selling of Stocks from my Holdings?

Is It Possible to use Stock sold to Buy other stocks on same Day?

[ShubhS9]

@jonu_dsa

Do I Need To Maintain Cash Margin i.e: 20% For Buying & Selling of Stocks from my Holdings?

For buying stocks you already pay full amount upfront. For selling stocks from your holdings you won’t need any margin.

@jonu_dsa

Is It Possible to use Stock sold to Buy other stocks on same Day?

Yes, you can use proceeds recieved from sale of stocks from your holdings to buy other stocks.

[jonu_dsa]

So In short Everything is the same For zerodha users rite?

[jonu_dsa]

Any other changes to Trading with Zerodha From 1st sept 2020. which i am Not aware of? please let me know.

[ShubhS9]

@jonu_dsa

Any other changes to Trading with Zerodha From 1st sept 2020. which i am Not aware of? please let me know

Everything has been explained here, give it a read.

[jonu_dsa]

Thank you Very Well explained…!!

[Manjucsw]

Sale proceeds from holdings can be used to purchase new stocks

Like how you can currently use stock sold to buy other stocks, the same will continue to be allowed from Sep 1st 2020. By debiting your demat account and doing EPI to the exchanges by 7.30 PM on the same day as explained above, we can allow you to sell your stock holdings without any margins. Also, the stock being EPI can be considered as margin, allowing you to buy more stock from the sale proceeds.

I feel Zerodha/SEBI is not charging for this above point…

For Ex. I bought shares yesterday and sold today, a sold amount will be using to buy new stocks…