Comment on Zerodha - Margin Policies

Nithin Kamath commented on 20 May 2013, 01:24 PM

Anil,

Firstly, didn’t understand your statement ” evading answering” ? Can you explain ?

1. As long as you are taking a position with order type as NRML, stipulated margin requirement will be blocked while placing an order.

2. Your definition of enough is not clear. in F&O margin requirement changes based on the contract you are trading, some of them might require 8 to 10% while others might require more. But as long as you are having exchange stipulated margin it should be enough and nothing to worry about.

That said, the important thing to note is that margin requirements are updated by the exchanges 5 times during the day. There is a possibility that on an extreme day, the movement in the stock could be so drastic that margin requirement might go up suddenly. This doesn’t happen often though.

When you write deep in the money options, this rule might again not apply. If you write deep in the money options, pocket the premium and use it to write more options, there might be a credit showing, but it won’t be a realized credit and hence it is possible that you have a short penalty as levied by the exchange.

But as long as you are playing by the rules, there is definitely nothing to worry..

Cheers,

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