Comment on Margins & Margin penalties when trading with leverage

Amit Kale commented on 27 Feb 2023, 08:36 AM

Hi Nithin,
Why brokerages like you don’t try to discuss with sebi about the huge margins blocked while shorting options? That will easily solve the problem. For example – more than 100000 INR margin is blocked if I short 2 lots of Nifty call or put. So how much is the maximum loss I will incur in a day even if Nifty falls or goes up by 1000 points? It’s around 100000 INR. So this kind of unrealistic scenario also is taken care of by the 100000 INR margin blocked at the time of shorting. So asking clients to bring in more funds when margins are already so high is ridiculous. Margin shortfall should be triggered only if the remaining margin after the notional loss is less than say 20 percent in my opinion

Thanks in advance for sharing your thoughts on this

Amit Kale

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