Why brokerages, taxes and charges deduct on T day when profit are settle on T+2 day.
What happen if all the charges are more than account balance ?
In Jan 2021 intraday with my full capital say 10000 and say 10x leverage if I earn a profit of 1000 then what amount will be available for use tomorrow?
Similarly, if I make a loss of 1000 what amount can I use tomorrow?
If you are trading in F&O, intraday profit will be available on T+1 day, if you are trading in Equities, intraday profit will be available on T+2 day.
Losses are deducted immediately when you square-off the trade.
I actually wanted a different answer. Please mention in rupees.
Please assume cash .
Please also assume the MIS trade was squared on Monday. Then what amounts will be available for use in trades on Tuesday, Wednesday and Thursday? For both profit and the loss scenario?
Sorry to be a bother!
Suppose you have 10000 opening balance on Monday.
On 1st trade you made 1000 profit. After you close this trade. Available margin will be 10000. This 1000 will be available to trade on T+2. Here on Wednesday.
Now on 2nd trade you made 1000 loss. This 1000 will be deduct from your balance immediately. So if you want to trade 3rd time you have 10000-1000 = 9000 balance.
Now other thing is. Brokerage, charges and taxes deduct on same day.
So if you made 1000 profit on monday. And 300 rupees is brokerage and taxes. Your profit is 700 rupees.
So Opening balance on Monday is 10000.
Closing balance on Monday is 10000 + 700 = 10700.
Opening balance on Tuesday is 10700-1000=9700.
You can see 300 charges deduct from your account on same day. So Opening balance on Tuesday was 10000-300= 9700.
If you made 1000 profit on Tuesday and again 300 are charges so profit is 700.
Opening balance on tuesday is 9700.
Closing balance 9700+700 = 10400.
Opening balance on Wednesdays is 10400-1000= 9400+700 (profit from monday)= 10100.
@ShubhS9 correct me if I am wrong.
For example, you took a trade on Monday worth 10k, after some time you square-off your position, the proceeds you will receive after squaring-off this position can be used immediately to take other trades. However, if you have made profits this will be available only on T+1 Day (Tuesday) if your trade was in F&O segment and on T+2 day (Wednesday) if your trade was in Equity segment.
Your interpretation is right.
Any losses you make are deducted immediately from your capital, also the charges will be deducted from your initial capital at the end of the day and on respective settlement day (T+1 day in F&O and T+2 day in Equity), whatever profit you make (in your example Rs. 1000) will be available for trading and will reflect in your available balance.
Now that we can not used Intraday profit until settled. SEBI should make changes in this rules. so brokerage and taxes should not deduct from capital.
It should get deduct from profit.
Both of you have tried very hard to make me learn. Actually I asked the questions in such a way that you could have answered in 10 words. But let me summarize what I have understood from your posts.
CASH n MIS
Monday: O/B 10,000 profit after deductions 1000 C/B 10,000 (11,000-1000 withheld till T2)
Tuesday: O/B 10000 loss after deductions 1000 C/B: 9,000
Wednesday: O/B 9,000 suppose no trade C/B 9,000
Thursday : O/B 9,000 +1000 withheld profit realized =10,000
Is my understanding ok?
Thanks a lot for trying.
Profit on Monday will be available on Wednesday. So on Wednesday 9000+ 1000 = 10000.
Profit are settled in morning on T+2 day.
But you should calculate how I explained you. becuase charges are deduct on end of the day.
You should use zerodha brokrage calculator. It will tell you how much points need to break even with Total charges.
OK, thanks for correcting.
However, with another broker I exited trades in MIS with profit. The next day my fund was negative and could not trade at all.
Maybe your charges exceed your capital and your losses deducted on same day.
10000 Opening Balance.
5 trades total profit = 12000
5 trades total loss = 10000.
Now you may thought that your profit is 12000-10000 = 2000.
But this is not the case.
The 10000 loss is deducted immediately from your capital so 10000 OB - 10000 loss = 0.
And 12000 profit say 20% are charges which is 2400.
Will deducted by end of the day. So on next day your capital will be 0-2400 = -2400.
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Please let me give you a real example,
I was trading with 27000 cap.
I had 2500 loss, counting all.
I was in CNC and at 3X leverage. I took full leverage so there was no room for more trades.
Next day my balance showed negative and I couldnât trade for 2 days.
Is that ok?
But of course, it was not with Zerodha.
So currently VaR+ELM requirement is still there i.e. you need to have this margin before you sell the shares from holding @siva @ShubhS9 or its changed from dec. 1 and we donât need that after clarification?
You donât need any margins to sell shares from your holdings. Though, when you sell shares from your holdings, 80% proceeds will be immediately for trading and remaining 20% will be blocked for the day and can be used from the next day.
Yes you said it clearly that one does not need funds in account before they can sell shares from demat holding but in this thread Nithin said clearly in July 20 that you need VAR+ELM requirement âŚhe gave example of reliance so now that rule is changed ? if yes you might want to put a update note so ppl donât get confused.
Yes I read that but he said zerodha is doing early payin on T+1 day and that you are going to do early payin on T day from Aug 2020 but not sure if you already implemented T day early Payin on Tday or not ?
We did and also I believe we have updated in other places which is posted after aug 2020, sent emails, added on support articles etc.