Title says it all but if I am doing intraday or cnc trade will zerodha close any positions which is having more loss than what the client has in his account?
Yes.Not only Zerodha, Other brokers as well.
Are you sure? Does that mean if I have MIS open position without any stoploss and the loss is more than the margin and I don’t have extra amount in account will it close the position automatically before it goes in negative?
Yes, Zerodha will Auto Square off your Loss making positions when Your Account Balance start going in Negative.
I read somewhere on other thread on this website that zerodha has some funds setup in case if market crashes and the client has loss more than his/her account balance so that they can settle the transactions with the exchange. If the RMS auto squares off before it goes in negative then what’s the use of this fund?
You get margin of 100% to 150% of Available balance when your account balance start going in negative.
Example:-
Account Balance Rs.100/-
Now, Say You bought Shares of Rs.100/-
And Position is open and you making Loss of Rs.100/-.
Current balance Rs.0/-
Now, say You making Rs.200/- Loss on open position.
Current Balance minus Rs200/-
You will get a Notification from RMS that you are using 100% of your margin.
If Your Loss will continue and start crossing 100% margin System will Auto Square off your Open Position.
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If your MIS losses exceed 50% of the available margin, then your position comes under the scanner of the risk team. You’ll receive an sms to add funds to avoid square off. If your losses continue and you do not add funds further, then the risk team will monitor your position and close it accordingly.
hi all,
i want to understand below query
if in MIS i have bought two stocks infy & Sbi
now if i have 50 infy shares making 20% loss and 200 sbi shares making 20% gain,
will infy position will be sq off by rms as infy is making more loss
or
no sq off will happen as overall i’m still in MTM profit
what will happen???
hi,
if i have 50 infy share making 20% loss and 200 sbi shares making 20% gain,
will infy position will be sq off by rms as infy is making more loss
or
no sq off will happen as overall i’m still in MTM profit
what will happen???
The rms team performs real-time risk management. As mentioned in the earlier post, they’ll monitor if the MIS loss in your account is greater than 50% of the available margin and then act accordingly. In your example, there will be no square off.
Yes, They do. It happened with me once.
When your fund is not sufficient they sends you message to add fund and when it goes negetive they will square off.
They squared off mine after Rs. -800 .
Although Zerodha will monitor your positions and square off loss making positions, the onus of squaring off position vests on the client. In the event that the account results into a debit, the funds will have to be brought in to avoid debit interest getting charged on the account.
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That is correct, sir. Thank you.
So to clarify, I don’t have to worry when I get these notifications that say ‘margin utilisation has reached 101%’ right? I should worry only when it crosses 140% because that would mean my losses are nearing 50% of the margin money available?
It is always best to bring in more funds whenever you get margin call and avoid square-off of your position.
But the issue here is it keeps sending alert messages for very small amounts like 100.03%. With BOs already blocked and pathetic leverages on MIS orders, we mostly use up the whole margin for trades and the market obviously won’t go unidirectional. During the day, the prices may go up or down. This way we will only be spending a lifetime adding money into Zerodha account.