The margin shown for a market order is initially calculated using the current LTP. However, because the order may need to be executed at the MPP-protected price, an additional amount is temporarily blocked as provisional margin.
This additional amount helps cover the possible difference between:
- The margin calculated at the current LTP
- The margin calculated at the MPP-protected price
For example:
- Stock LTP: ₹2,400
- Quantity: 100 shares
- Margin based on current LTP: ₹2,40,000
- Applicable MPP: 0.5%
- Provisional margin: approximately ₹1,200
- Total margin required: approximately ₹2,41,200
The margin breakdown shown on the Order Form is:
- Margin for market order: Margin calculated using the current LTP
- Provisional margin: Additional margin blocked for the MPP protection range
- Total margin required: Final margin required after considering MPP
The provisional margin is temporary. Once the order is completed or cancelled, any unused portion of the provisional margin is released back to your available funds.