@Subh Why when Used Margin increases it gets adjusted with Available Cash instead of Collateral Margin.
Will this cause negative Available Cash also & what is the impact.
I have hedged positions(sell & buy options) & my max loss is X which is already known on settlement but why my Available Cash keeps getting reduced as movement in market continues due to Used Margin increase.
The used margin increases if the MTM loss happens during trading hours. Exchange regulations mandate that all Mark-to-Market (MTM) settlements must be cash-based. So only it is adjusted in available cash.
Trading and taking on new positions while maintaining a negative balance would effectively mean that the derivative trades are being financed by the stockbroker, a practice that is not permitted by the exchange.
To prevent this situation, new trades are blocked if the cash balance is in the negative. This means that taking new positions in equity intraday and F&O positions will be prohibited. However, squaring off existing positions will still be allowed as usual.
How to know how much of available cash has been blocked in MTM - We need this information in Funds page as it is causing lot of issues to arrive at the overall Available Cash value when we calculate daily profit loss. (Meaning how much is the actual loss/profit & how much has been blocked for MTM as part of the Available Cash)
MTM loss is deducted from cash anyhow, but much and breakdown for mtm will take more time to be shown on funds page.