Peak Margin Reporting - Scenarios in which margin penalty is charged to clients
Dear Customer,
With recent changes by the Exchanges in Peak margin reporting (during the day), we see an increase in our clients' margin penalty. Hence as a precaution, we want to reiterate the scenarios in which if the client doesn’t have sufficient margin during the day, it might result in a peak margin shortage penalty. Please take note of this very seriously.
- Clients squaring off long position FIRST while exiting the hedge position in options, the short position will require regular margin.
- In the calendar spread strategy, if the ANY position is squared off OR on the expiry date, if the position is not rolled over to the next expiry date, the other leg open position will require a regular margin.
- The client has benefited from a lower margin in hedge positions by placing orders, one leg ‘fully executed’ and the other in ‘pending’ status. Later in the day, he places other trades. As exchanges don’t consider pending orders while calculating the margins, the client needs to provide a margin for all fully executed open positions till the pending order is fully executed.
- 5paisa provides margin (80% of sell proceeds) on the selling DP free stocks, which the client utilized for other intraday trading. Later in the day, the client bought back sold DP frees stock, effectively, no sale credit coming into the ledger at the end of the day. All intraday trades for the day shall attract margin penalty as there was no margin available for these trades.
All are advised to monitor their positions and margin requirements to avoid margin shortage penalties.
Happy Trading!