What is Peak Margin?

What is Peak Margin?

Peak Margin is a regulatory measure that mandates brokers to collect a minimum margin from clients before executing any intraday or delivery orders in the Cash and derivatives segment. The main objective of Peak Margin is to curb excessive leverage in intraday and derivatives positions.

Clearing corporations play a pivotal role in determining Peak Margin by taking four snapshots at predefined time intervals throughout the day to calculate margin requirements on open positions. The highest margin requirement among these snapshots is considered as the Peak Margin. 

The implementation of Peak Margin aims to promote effective risk management and mitigate potential market volatility resulting from excessive leverage. It ensures that traders maintain adequate margin cover to fulfil their obligations and reduces the risk of default.

Brokers are tasked with ensuring that their clients follow the prescribed Peak Margin requirements set by regulators. Compliance with Peak Margin requirements is essential for traders wishing to engage in intraday and derivatives trading in the Cash segment.


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