Comment on Zerodha - Margin Policies

Murtaza Telya (Zerodha ID- DM1084) commented on 18 May 2014, 11:44 AM

Hi Mr. Nithin,

Hope all is well on your side.

I had an issue with a recent trade that I executed.

I initiated a call spread on the 9th of May 2014. I bought a May 2014- 7000 call at Rs 228, and I sold a May 2014- 7250 call at 133.8. The daily MTMs are given below:

12 May 2014 – 7000 call closing price – 289.3, total profit- Rs 61, 7250 Call closing price – 173, Total loss – Rs 39.2, net MTM- 1090 rs

13 May 2014 – 7000 call closing price – 291.3, total profit – Rs 63, 7250 Call closing price – 158.3, total loss – Rs 24.2, net MTM – 1940 rs

14 May 2014 – 7000 call closing price – 305.1, total profit – Rs 77, 7250 Call closing price – 172.55, total loss – 38.75, net MTM – Rs 1912

15 May 2014 – 7000 call closing price – 327.7, total profit – Rs 99, 7250 Call closing price – 196.65, total loss – 62.2, net MTM – 1840 Rs

On the 16’th of May, when I looked at my account cash limit, I had a negative account balance of -4500 rupees. I called the Zerodha helpline and tried to explain that I should be Rs 1840 in the money, not Rs 4500 out of the money, but I think the person who answered my call couldn’t understand my query and he kept saying that I had to deposit money in my account ASAP.

I don’t know why this has happened. Shouldn’t the profits from open positions be added to the losses to find net MTM ?? Please explain why this has happened.

Awaiting your response.

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