What is the new margin requirement from 1 Dec?

Jenny_Benz · November 28, 2020, 2:50am

Derivatives(Equity FO, currency and commodity)

25%(4X) of the SPAN + Exposure margins until Feb 2021
50%(2X) of the SPAN + Exposure margins until from Mar to May
75%(1.33X) of the SPAN + Exposure margins until Jun to Aug
Full SPAN + Exposure margins from Sep 2021

Can someone please explain with an example of the new margin requirement from 1 Dec?
What is the current margin requirement before Dec?

Also, is this applicable only for MIS orders or NRML orders also?

ShubhS9 · November 28, 2020, 3:39am

Above rules are applicable only for Intraday (MIS, CO), not for NRML.

Taking example of Nifty Futures, current SPAN + Exposure margin requirement is 150k, this will remain the same for overnight (NRML) positions, but will increase in phased manner from December 1 for Intraday (MIS, CO).

Taking above example of Nifty Futures: 150k margin requirement.

From December to February: Brokers will have to block minimum 25% of SPAN + Exposure margin for Intraday products (MIS, CO) ie. 37,500.

From March to May: Minimum margin which needs to be blocked for Intraday products will be 50% of SPAN + Exposure margin, ie. 75,000.

From June to August: Minimum margin which needs to be blocked for Intraday products will be 75% of SPAN + Exposure margin, ie. 112,500.

From September 2021, brokers will have to block 100% of SPAN + Exposure margin ie. 150k. Which essentially means, the leverage which you are currently getting for trading F&O in Intraday (MIS, CO) can no more be offered.

aniln · November 28, 2020, 3:43am

I do not do FnO but only cash …will it effect me in Intraday and Delivery ?

ShubhS9 · November 28, 2020, 3:49am

Intraday leverage in cash segment too will reduce in phased manner from December to August and will be maximum 5x from September 2021. Would request you to read this post for detailed explanation: Peak margin requirements from Dec 1st 2020 & its effects

For delivery trades you pay 100% amount upfront, so nothing changes here.

Jenny_Benz · November 28, 2020, 4:00am

From December to February: Brokers will have to block minimum 25% of SPAN + Exposure margin for Intraday products (MIS, CO) ie. 37,500.

So this extra 37K we need now from Dec?

ShubhS9 · November 28, 2020, 4:08am

This 37k is not extra, this is fraction off 150k SPAN + Exposure margin.

See, for example earlier some brokers used to block only 15k off 150k and give 10x leverage for using Intraday products, now from December they will not be able to do this and will have to block minimum margins as prescribed above, which caps leverage offered.

Jenny_Benz · November 28, 2020, 4:13am

Thanks. This will be only for option selling and futures right? Option buying anyways didn’t have this

ShubhS9 · November 28, 2020, 4:16am

Right, only for Writing Options and Futures. For buying Options you pay amount equal to Premium * Lot Size upfront, there is no need of margins.

Lookatraghu · November 28, 2020, 4:24am

Does zerodha already factored it.

Kokilan_S · August 31, 2021, 3:27pm

Hi,
Sorry to ask, i need further explanation.

If i do an entry (either buy or sell) to a Future with Normal type of order, and marking GTT with 10% to exit , will the said margin be required?
if do an entry to Option ( either Call or Put) , with Normal type of order, and marking GTT with 10% to exit, will the said margin be required?
if i do intraday trade and made entry exit in same day with Normal Type of Futures , Call Options, Put Options orders , can the traded amount be used again for another amount?

Kindly share a simple explain

Thanking You
Kokilan S

ShubhS9 · August 31, 2021, 3:39pm

You don’t need margins to exit (square-off) your position.

Yes, the margins released from squaring-off your positions can be used for other trades. Only the profit you make will be available from next day onwards.

Kokilan_S · August 31, 2021, 4:14pm

Many thanks