I am happy to announce that we have upgraded our trading systems and changed our margin policy for derivative segment in line with the latest regularity guidelines thereby providing margin benefit for hedge positions. 

Currently we provide the margin benefit for a hedge position when both the legs of the order i.e. buy and sell are executed. Though ultimately a customer gets the benefit but they still need more margin while placing the order. The change which has been implemented will give margin benefit even while placing the second leg of the hedge order. For Eg: If you buy Nifty 11200 CE of 20th Aug you pay a premium of approx ₹140. If you hedge this position by selling Nifty 11400 CE of 20th Aug you need margin of ₹1.18 Lacs. Though once both the legs are executed then the margin requirement goes down to just ₹31,000 but while placing order we ask for margin of ₹1.18 Lacs. In the new implementation clients will only need ₹31000 as margin while placing a sell order and not only at execution of the order. 

Lot of brokers today provides hedge margin benefit on both intraday and delivery trades. Though technically we can allow but i see a huge risk here if clients end up manipulating the system. Today we provide 3x – 6X (depending on subscription plan) exposure in intraday trading in derivative segment for our clients. Providing hedge margin benefit will lead to additional benefit on and above leverage already provided. This puts the system in risk and slight volatility in markets will lead to huge losses for clients. Hence as a prudent risk management practice we are restricting the hedge margin benefit for only delivery trades. Clients can avail the hedge benefit by choosing DEL as type of order in their order entry window. For intraday (INT) orders customers will continue to enjoy exposures provided for taking any position including hedge.