What is margin shortage penalty?

What is margin shortage penalty ? It will effect from August 1st.

Margin shortfall penalty is already levied on Futures and Options, you can learn more about that here.

If you are talking about Equities, SEBI has mandated brokers to collect VAR + ELM upfront from August 1st, though penalties for short collection will come into effect only from December 1st, more on that is discussed on this thread No additional intraday leverages from Aug 2021 in Indian capital markets


Say in my trading account I have Rs.2L(available cash margin). Now if Day-1 at 15:29 I create long/short future position on some f&o stock which blocks 2L margin. On Day-2 at 09.15, I am exiting this position and on same Day at 09.20, I am creating another option position(NRML, i know i can use MIS but still) by selling ATM BankNifty options(both CE and PE) which say need Rs.1.90L as margin. I will exit this position on Same Day at 15.10 and will enter to new future long/short overnight position as i did on Day-1 (surely future stock could be different or same). Is this feasible situation or will I face peak margin penalty?

You can use the margin released from squaring-off your positions immediately for other trades. Peak margin penalty will be applicable in the scenarios explained here.