There are two major regulatory changes from Sep 1st, 2020:
- The method of pledging stocks, and
- Upfront margin requirements (Stocks and F&O on NSE, BSE, MCX)
New pledging system
Until now, when you pledged stocks as collateral to receive margins for trading F&O, you had to move it from your Demat account to the broker and in turn to the clearing corporation. Going forward, the stock will continue to remain in your Demat account and can be directly pledged to the clearing corporation. Over the last weekend, we have unpledged all securities which were pledged with us and transferred back to the customer Demat account. Many have already repledged it using the new mechanism. Check this article on how the new pledging mechanism works.
New margins system
There are going to be a bunch of changes from tomorrow with respect to margin requirements. Find below a quick summary; you can check this post to know the details.
Sale proceeds from holdings can be used to take new positions
We are ready with a new system to debit shares from your Demat and make an Early Payin to the exchange on the day it is sold. By doing this, we can ensure that you can continue using the full value of sale proceeds from your stock holdings as soon as you exit them to enter new positions — other stocks or F&O positions. Nothing will change for you as a client of Zerodha
Important: In order to give you the benefit of being able to use the holdings sale credit immediately, we are resorting to debiting shares on T day and doing an Early Payin to the Exchange. Till the time that the stocks are collected by the Clearing Corporation (T+2), the shares will be in the Early payin account on which certain corporate action benefit are not receivable. As such, if you wish to be eligible for any corporate actions, like buyback, please do not sell the shares and continue to hold them in your account till Record date.
Using sale proceeds from T1 holdings
Similar to your stock holding, you can sell the T1 holdings (stocks bought the previous day and yet to be credited to your Demat) and use the entire value of the proceeds to buy new stocks for delivery. But there is going to be a small change here if you want to use the proceeds from T1 holdings to trade F&O, you will be able to use only 60% of selling value. Check this to know more.
Intraday profits can be used for new positions only after it is settled
Currently, you can use intraday realised profits for taking new positions on the same trading day. Going forward, you will be able to use it only after 2 days in case of equity/stocks and the next day in case of F&O. This is because the settlement cycle for equity is 2 days and 1 day for F&O, which is when the profits get credited to your account from the exchange only then. So intraday equity profits earned on a Monday can be used to trade more only on Wednesday, and intraday F&O profits earned on Monday can be used to trade more only on Tuesday.
Option sell credit can be used only to buy options on the same trading day
When you exit your long/buy option positions or enter new write/short options, the proceeds or credit of option premium can be used for only new long/buy option trades on the same trading day and only within the same segment (proceeds from equity options can’t be used for currency or vice versa). You can use this proceeds or option credit for all other types of trades only from the next trading day.
Intraday leverages for now remain the way it was before. Note that the account balance on Console may not match with Kite balance as Kite balance will not include unrealized intraday equity profits until T+2 day, while Console will show balance including intraday profits.
If you have any follow on questions, post on this thread on Trading Q&A.