Comment on Zerodha - Margin Policies

Sukesh commented on 17 Apr 2014, 11:21 AM

Hi Nithin,

This has confused me for quite some time, i seem to have understood it now.. Can you please confirm if the below mentioned working for a hypothetical scenario is correct?

I have margin of 40k in my account and no other open positions.

DAY 1: I Sell a straddle (Say Nifty 6000 CE & PE).
Margin Requirement for this position – 50k
Amount i received from selling the straddle – 15k
Net cash margin blocked in my account – 35k (50k margin required – 15k i received)
Available cash in my account – 5k (40k cash in my account – 35k margin blocked)

DAY 5: Margin required went down to 40k (From 50k 5 days back)
Now cash in my account would be 15k (40k cash which was already in my a/c + 15k sale
proceeds credited to my account for selling straddle – 40k current margin required)

DAY 8: Margin required went up to 60k
Cash in my account -5k (Shortfall of 5k to the required margin)
-> I have margin of 55k in place of required 60k. i.e, short by about 8.33% OR I have 91.6%
of required margin.
Question: Now my position wont be squared off even if i am not maintaining the required
margin – because i am maintaining above 80% of required margin right?

DAY 9: Margin requirement went up to 75k however total margin available in my account is 55k
i.e, 73% of requirement
Question: Now my position will be automatically squared off because the margin available in
my account is below 80% of the requirement right?

This clarity would help me a lot in starting my new strategy confidently.

Thanks in Advance

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