Zerodha – Margin Policies
Traders,
Margin Policy can change at any point of time based on market volatility.
The following post will give you our standard margin policies while trading equity intraday & delivery, f&o, currency and commodity. You can trade equity either intraday or delivery on NSE, BSE and MCX-SX. If you are not enabled on the latter 2 exchanges, print the segment addition form and courier back to us if you wish to.
1. Stocks or Equity or Shares Trading
Intraday equity:
When you take a trade in equity and square the position off before the end of day, it is called as intraday equity trading. Since you don’t carry the position overnight, we provide you a margin or leverage of between 3 to 20 times on around 150 liquid stocks to trade for intraday. You can trade intraday at Zerodha with leverage by using these 2 product types while taking a trade.
MIS (Margin Intraday Square off)
When you use this product type, you commit on keeping the trade intraday and hence we give you a leverage between 3 to 14 times based on the risk and volatility of the stock. Our margin calculator tool has a list of all stocks and the MIS leverage you get.
CO (Cover Orders) & BO (Bracket Orders)
Cover orders and Bracket orders are unique orders at Zerodha where you can trade intraday with a definite and compulsory stop loss. Since the risk with such a position is low, the margin required is less and hence the leverage higher. When you trade intraday using cover orders, the leverage you get vary from 6 to 20 times(twice as much as MIS). . Read this to know more on Cover orders and this for Bracket orders.
Our Margin calculator tool has a list of all stocks with MIS and CO/BO margin/leverage.
Equity Margin Calculator
Imporant
Even though we square off all intraday positions automatically around 3.20 pm, the onus of squaring off all intraday MIS/BO/CO positions lies with you. If any intraday position or a MIS/BO/CO trade is not squared off on the same day for any reason, it shall get converted as a Cash and Carry (“CNC”) or NRML position and carried forward to the next trading day. Our RMS desk shall square off any such position the next trading day without the requirement of a margin call, if the necessary cash is not available in the Client’s account.
Delivery Equity:
When you buy stock and hold it overnight, it is called a delivery trade. At Zerodha, you need to use product type as CNC while placing a trade to take delivery of equity stock. The product type CNC will show up on your order window only if you have a demat account mapped to your trading account since you would require a demat to take delivery of the equity that you purchase.
At Zerodha we provide no leverage when you are executing delivery trades which mean that you if you want to buy Rs 1lk of stock as CNC, you will need this Rs 1lk in your trading account and similarly if you want to sell Rs 1lk of shares with product type as CNC, you will need these shares in your demat account mapped to your trading account.
2. Futures Trading – Equity (Stock & Index), Currency & Commodity
Futures as such are inherently leveraged which means that to buy X amount of futures you need only a small portion of it called as margin in your account. This margin to buy futures is stipulated by the various exchanges.
For NSE, Zerodha settles with exchange on T+0 and hence has the lowest futures margin requirement.
While trading futures at Zerodha you can use 3 product types:
NRML (Normal)
To take position as NRML you will need the complete exchange stipulated margin, but once you take a position as NRML you can hold the position till expiry, provided you’re maintaining such stipulated Exchange margins until expiry.
MIS (Margin Intraday Squareoff)
MIS is used by intraday traders as all open positions get squared off before the end of day. But since no position is carried forward overnight the margin required is also lesser than the exchange stipulated margins.
- For equity & Index futures, MIS margin: 45% & 35% of NRML margin respectively, all MIS positions squared off around 3.20pm.
- For Commodity futures, MIS margin: 50% of NRML margin, all MIS positions squared off about 25 minutes before market closing
- For Currency futures, MIS margin: 50% of NRML margin, all MIS positions squared of around 4.30pm.
CO (Cover orders) & BO (Bracket orders)
Cover and Brackets are unique orders at Zerodha where you can trade intraday but with a definite and compulsory stop loss. Since there is a stop loss placed, the risk of the position reduces and hence the margin required to take it reduces as well. Read this to know more on cover orders. Read this for Bracket orders.
Using Cover and Bracket orders, you can trade futures with lesser margins than NRML and MIS. Presently Cover order facility is available for equity, commodity and currency futures.
All the required NRML, MIS and CO/BO margins are updated on our Equity futures margin calculator, Currency Futures Margin calculator and Commodity futures margin calculator daily.
Equity Futures Margin Calculator
Currency Future Margin Calculator
Commodity futures Margin Calculator
Imporant
Even though we square off all intraday positions automatically around 3.20 pm, the onus of squaring off all intraday MIS/BO/CO positions lies with you. If any intraday position or a MIS/BO/CO trade is not squared off on the same day for any reason, it shall get converted as a Cash and Carry (“CNC”) or NRML position and carried forward to the next trading day. Our RMS desk shall square off any such position the next trading day without the requirement of a margin call, if the necessary cash is not available in the Client’s account.
3. Options Trading – Equity (Stock & Index) & Currency
Option buying:
When you buy options, either equity or currency there is no additional leverage we provide. So if you are buying calls or puts of any contract, the premium required to buy them has to be present in your trading account. You can trade options either with product type as NRML or MIS, but since there is no additional leverage provided if you use product type as MIS, it is advisable not to use MIS while buying options since all MIS positions would get squared off before the close of markets.
But note that when placing market orders on options on an illiquid contract where the ask price is more than the last traded price, you will be able to purchase at the ask price even if the money in your account is just enough to buy at the last traded price. Make sure to transfer additional funds immediately into your trading accounts if you buy for more options than the money in your account.
Option Writing/Shorting:
When you short an option, the margin required depends on various aspects like underlying, expiry, volatility and more. We are the first brokers in India to have an online SPAN calculator tool which lets you calculate the margin requirement for shorting an option by mocking the position in the tool.
You can short option either using the product type as NRML or MIS. The SPAN calculator tool lets you know the margin required to hold overnight or NRML margin, if you trade using MIS you will need only 50% of that margin.
SPAN Tool Calculating Option Shorting Margin
Important
- The settlement cycle in India is T+1 day in case of F&O (Equity, commodity, currency) and T+2 day for Equity delivery. What this means is that credit from sale of option contracts & any profits from F&O positions gets credited only the next day, and any sale credits from equity delivery trades happen on T+2 day. This credit is available for you to trade intraday, but there might be a short margin penalty applicable if you carry forward positions using this unrealized credit.
- When you send Market Orders in Options for multiple lots, our system checks only for the margin of the first lot and validates your order. For example, if you see the price of a Nifty option at Rs. 100 and you have Rs. 75000 in your account and you send a market order it validates only for the first lot and sends your order through. During execution if the price of the option goes higher, your order still gets completed although you will end up with a debit balance. This debit balance has to be cleared by you by end of day failing which you will be charged interest as per our policies until you clear the debit balance.
- Because of illiquidity of stock option contracts, market orders have been disabled on stock options. Only limit orders are allowed. Place a limit buying order higher than the current price or selling order below the current price, this will act as good as market order but will also protect from any impact cost due to illiquidity. You can place market orders on index options.
- For all intraday positions (MIS, CO, BO), even though we run square offs automatically, the onus is on you the client to ensure all MIS,CO,BO positions are squared before market closing.
The SPAN tool can also be used for calculating margin requirement for multi-leg trading strategies.
Happy Trading,
* this post was last edited on 8th Nov 2015
Nithin Kamath
Founder & CEO @ Zerodha. Partnering startups through Rainmatter. Love playing poker, basketball, and guitar. @Nithin0dha on Twitter. | Personal website: https://nithinkamath.me
Great explanation.Really helpful for begainer like me.
Thank You.
can i trade using zerodha in indian markets , from USA?
Yes you can!!
is Zerodha trading platform available for Windows mobile?
The mobile version presently doesn’t work on windows phone.
We have a HTML5 version Z5 that will work on your windows mobile as well. Check this link
Hi,
Suppose your are holding rs 2 lakh worth stocks in ur demat account and have 1 lakh cash, wat wud be the initial margin for intraday trading in Nse Futures or options?
Yasaswi it depends on what stock you are going to pledge, if the stocks you hold has a 20% haircut, then you can use 80% of this 2lks which is 1.6lks + 1lk = 2.6lks for intraday f&O positions.
Pledge as in you have to transfer the stocks to any other demat account or will the stocks stay in your demat as the margin is only for intraday?
Yes, you need to send us an email request to pledge stocks, once you do this the stocks would move from your demat to Zerodha pledge account, and once there you will start getting intraday margins for F&O immediately
Can I use this margin for intraday equity trading too? Also are there any charges for pledging the stocks? And is it really necessary to send an email for the same? With traditional brokers like IIFL, one needn’t send any email and it is a very hassle free process.
No Prateek, this can be used for F&O trading only. One round trip of pledge and unpledge costs around Rs 55 per scrip (irrespective of the quantity).
On Q, we are giving an option to place a pledge request. It will still take around 24 hours to get the benefit.
Unlike brokers like IIFL who keep the stocks with them when they pledge, we pledge it directly with NSCCL (NSE). So we don’t end up lending the same stock to someone else, or charge interest on margin provided.
Thanks for such a prompt reply. Initially I was amazed when I saw 0.01% brokerage for intraday equity trading but now I guess I will have to continue with IIFL (who charge 0.05%).
And I am sure you would know this, but still just to clarify, IIFL doesn’t charge any interest on the margin they provide for intraday equity trading.
Prateek, we charge 0.01% or Rs 20 whichever is lower. 🙂 So you never pay more than Rs 20. But yes the pledging bit is something that will be simplified in the next few months.
Cheers,
Can you tell me why you are giving margin for future and option only, not for intraday equity scripts.
We give for intraday equity scrips as well, check this: https://zerodha.com/margin-calculator/Equity/ ,upto 10 times and upto 20 times if you use bracket or cover orders.
Can you please confirm –
1) Does Zerodha charge interest on the margin provided against shares pledged?
2) If yes, on just the margin utilised or the entire pledge created? Also how much %?
3) Am I eligible to get bonus, dividend etc on the pledged shares? I want to create a pledge and keep writing covered calls for a considerable duration.
4) If I have one lot size quantity of shares (Say 500 shares of RIL) pledged and if after haircut on that stock the margin available is more than the required to write a CALL on the same stock, Do I still have to bring some cash too? If yes, how much?
5) Same question for Futures. Asking separately because futures have EoD MTM. So, I believe some cash component will be required so as to avoid small transactions for any shortfall in margin.
6) Is Writing a CALL on the pledged underlying different than using that margin for writing CALL on some Index or unrelated stock? I am asking from Zerodha margin policy point of view and not risk-cover point of view.
7) Que 5 is asked because if I have 2 underlyings pledged to write covered calls will the margin be pooled or will it be recognised in pairs of (underlying-Call)? I hope it does. If one underlying falls in value reducing over all margin without increasing risk level will there be an auto square off? which position gets auto squared off? The other underlying may be up and that call might be showing a loss. Do I have any control on which position gets squared off? IMO, nothing needs to be squared off since there is no margin risk on any position. They are COVERED calls and any RMS should recognise that fact. If not, is there any way I can mark some position as a covered call position and pledge equivalent number of shares?
– Sorry for too many questions. Thanks,
1. Currently we are not, very soon we will as we intend to provide margins without even pledging (stocks lying in demat).
2. How much is still not decided. But for now, there is no charge. It will be charged based on how much margin used.
3. Yes, you are the owner of the stock, you will get benefit of all corporate action.
4. ALL MTM losses has to be paid in cash to the exchange. So we usually tell clients to keep anything between 10 to 20% of the margin required in cash.
5. Same as above.
6. No, it is all treated as call option writing. No margin benefit you get because you are writing calls on the same stock.
7. Unfortunately exchanges won’t recognize this as covered calls. All losses is debited immediately whereas all credits is received on T+1. You will not have control on what gets squared off first. So it is best to have some additional cash for all MTM losses.
Sir, Would it be Pledge or Pool transfer.? Coz in case of pledging the shares, our DP account get sealed by you which can’t be transferred even after selling for those stocks (which are in pledge), you need to let it released after selling it. Is it correct?
A follow up question on this one: is it possible to request Zerodha to sell shares that have been pledged by an account holder (via phone/email)? Also, if this is possible, can such an order be a Limit order or will it only be a market order?
Yes, you can send an email to unpledge. Yes both limit/market order is possible.
Dear Nithin
thanks but I guess it is not fully clear, perhaps because I didn’t ask the right question. Allow me to ask with a hypothetical example:
Let’s say I have Axis Bank stocks worth roughly 1lacs pledged and as a result have a margin of about Rs 70k (after haircut; I’m not sure the haricut is 30% but let’s assume for the moment that’s the case) Now let’s say I use this margin plus a little cash and buy futures to keep overnight. Next day markets cracks down and I have heavy losses – so much so that the cash isn’t enough to cover MTM losses.
Can I then send email (or phone) instructions to zerodha to unpledge+sell immediately and cover the losses?
Yes, you can send an email.
Vikesh, it will be a pledge. So we take the shares from your demat and depost it with NSCCL (NSE) directly, and this margin gets released for trading F&O to your account. If you want to sell, you will have to first unpledge and only then sell.
I have 50000 stock in south indian bank at ambalalshares and pledged them with axis bank and created a overdraft account for the stock, can i do this also in zerodha.
Yes, you can pledge the stock with us and take margin for trading F&O.
Hope you will provide the option to the customer of –
either
1) Pay Interest on margin and let the shares in demat
or
2) Pay pledge-release fees and no interest on margin (the present system)
Somehow your reply above did not have a “Reply” button next to it so I am asking it here. What is the right way of doing this?
Thanks,
PD, This process of manually having to pledge is something we will be stopping soon. It is quite painful operationally and also since the margin can’t be used for options/stock buying, it also causes some confusion. Will keep you posted on what route we take.
” if the stocks you hold has a 20% haircut ” whats haircut? and in which chapter of the module this term was explained??
Thanks for such a nice app on mobile android will also suggest to show volumes on app.
Dear sir,
I am a new trader in zerodha. Can you please tell me what is the exact square off time for intraday trade i.e BO. In your site time has mentioned as 3:20 but today my trade has square off at 3:15. And for 5 mints i had lost Rs. 400. Please clarify it.
Regards
3.20 is indicative time, sometimes it can be a little early or later based on market scenario. Best not to use BO and MIS till the end.
ok sir, thanks
Dear sir, there is only 3 times trading limit for intraday.( A and B . Both grade share). Compare to others too less. plz clirify me is this right or not?
It is upto 20 times based on the stock. Check this list: https://zerodha.com/margin-calculator/Equity/. If you use cover orders/bracket orders while trading, you get higher leverage than what is on this list. Check this: https://zerodha.com/margin-calculator/BracketCover/
Pls reply urgently as soon as possible,
I have entered in 4 fno stock futures position yeterday, while entering i have sufficient funds, later today wen i checked my acc is short of 18k funds, may be due to MTM..My question is today will get chance to exit and get some funds or is there anything like u will squareoff to provide for the margin
Varun, if you have any urgent query call our support numbers. If the margin in your account drops below the minimum SPAN margin, it gets squared off usually between 3.10 to 3.30pm.
Nithin Sir, I’ve read a lot of time the technical word SPAN & Exposure margin but not getting a clear meaning of it! can you please explain it?
Is there a way to pull daily margin values for CO or MIS using a pythong script?
No
sir i sold my share but its showing in margin available not n the funds why?
Hey Rahul,
The funds that you get from selling stocks is actually credited to you on the T+2 day, i.e., if you sell a stock today, you’ll receive the credit of the proceeds only on Friday. Until you receive credit, you cannot withdraw this fund. As such, you see this as a margin until then. Read more about the settlement process here: https://zerodha.com/varsity/chapter/clearing-and-settlement-process/
Hi Nitin,
If you could arrange the leverage for equity delivery trades for a week like 5 to 10 times would be helpful. The investor can expect bull trend and helps nations to uptrend attracting the investors.
Regards,
Mahendra
Margin policy coming soon for delivery reading…I heard this from last 7 months but when you started?
Zerodha is only who didn’t provide margin for delivery trading
Dear sir,
I have an account in zerodha I have a doubted.
Suppose I invest in X stock at 10,000 Rs investment at 100 rs * 100 quantity on January 2018 and wait for June 2018 in between at March or April month this stock is delisted by NSE or BSE due to some other issue In that case what happen.
Is investment value as per current value (March month) will added in my demat account or i should take some other step for return back my investment.
Waiting your positive reply…
If a stock is delisted for regulatory reasons then there is no way for you to sell unless the issue is resolved. However, if a company goes for a voluntary delisting then there will be a window wherein you can tender your shares at a price specified by the company.
Whats delisted? In what way it affects Intraday/ delivery trading?
Sir
Pls add weekly expiry dates also in the margin calculator
The margin requirements are the same as that of the monthly contracts.
So, are you saying for a particular strike the margin for contract expiring on 2nd July will be same as of contract expiring on 9th July? Doesn’t seem to be right, as for the same strike margins are different for monthly contracts (time decay has its role to play i guess)
Also, the margin for weekly options will be same as of current month contract?
This shouldn’t be an issue anymore. We now show the margin required on the order window on Kite. Read more here.
When will you guys offer trading in overseas market at least cash markerts like USA
Something we’re working on right now, Akhil. Should be available in a few months.
upto what maximum capital investment MIS margins will be applicable?
Hi nitin,
We have some margin(fund) in our demat acc
In equity intraday trade we used that margin with excess margin given by zerodha
That excess margin has any charges.?
What charges value?
How it will deducted?
Like in equity intraday trade I buy CANBK 1000 share for 140.
This total value wil be 140000
But in my fund I have only 40k,
Then excess 1 lac will be given by zerodha, that 1 lac is chargeable
What is charge & when it will deducted?
But also in trade actually it is showing that Amy is used less than 40k, what is that actually i don’t understand, can u explain.?
Zerodhas kite app is very bad.
Sometimes the app is hang
How much to invest in commodity fund margin please tell
How much is upto you. You can check out margin required to trade different commodities here: https://zerodha.com/margin-calculator/Commodity/
Great explanation.
I never spoke to any person in zerodha office. I dont know how to make call with the number given in the website. Please help me. I want to trade in commodities and currencies. I cannot buy huge quantities in index option and stock option. Only a few quantities are accepted. Please help me.
You should check out the Kite user manual, Zo.
Will Margin be available someday…
Shouldn’t you take a re look at the margin allowed for MIS orders. I have a feeling that the system has been designed to calculate margins according to the price of the stock. In actuality, the smaller value stocks are far more disastrous and prone to drastic movements than the high value stocks. However, for tried and tested shares such as HDFC and Reliance, you’re giving such a miserable margin amount whereas when I check margins for dangerous shares that make rapid swings like anything such as Yes Bank, you’re giving 15 or 20 times margin.
Margins are calculated using an algo called SPAN that determine margin requirements according to a global (total portfolio) assessment of the one-day risk for a trader’s account.
Sir,
On the question of margin and leverage, as long as we have squared off our existing positions, our entire funds are back with us for trading again right? Is this margin limited to a day or per trade irrespective of how many trades we place.
Take for example I have 100 Rs. There is 15x leverage for stock Tata Motors. So I buy shares worth 1500, book minimum profit, place an order again because I still find it bullish and I exited early, and so on. Can I keep on placing orders and exiting as many times a I want? I think this would be an easier option rather than trying to repeatedly keep editing several trades that get placed, but I worry that another order may get blocked.
That would work, yes.
Sir leverage provided by zerodha is chargeable of any form(means interest on leverage)
Man lo 10 times leverage mil raha h
Mere account me 40,000 Hain to me 4,00,000 ke share equity intraday me purchase karta sham me sell kr deta
To kya muje 3,60,000 jo broker ka amount use Kiya tha uspe broker ko interest Dena hoga?
2) agr Mera trade loss me Jane laga to broker automatic square off kr deta hai…kitne loss me Jane per ye bataiye
Hi Aftab.
1. No interest charges.
2. This depends on your position.
Can I short on margin?
Are we used balance capital for crude oil which is already used in options ?
Looking forward to cover order
facility in commodity also shortly
Hi,
I generally buy at close today & sell next day at open (BTST).
Is trading on margin allowed in this case on Zerodha or I can buy only my account balance without leverage.
someone told me that ICICIdirect allows to keep margin positions for 5 days.
Best regards
In case of delivery, leverage option is not there on Zerodha.
Yes ICICI provides leverage for T+5 days in case of NSE
and T+90 days for BSE.
But ICICI deducts every day some amount from your account till you exit the stock. And also brokerage charges are very high on ICICI, applicable both at buy and sell time.
can i do BTST trades in zerodha. suppose i bought today and want to sell tomorrow those shares can it possible bcoz in 1 day these shares would not come in my account so how it is possible to sell without coming in my account?
Aditya, yes we support. Check this post. Has everything you need to know.
cant view my limit amount
it was visible on friday as 1714 now it is zero
With us, you will need the complete money for keeping overnight equity positions.
@Girish, if you are checking this position on a weekend, we run testing sometimes and it is possible that it will show 0 at those times..
How can I short the stock with CNC is it even possible?
Srinivas, it is possible only if you are holding stocks in your demat..
The same question arised for me also which srinivas asked you,
But I am asking you, without share holdings in demat account whether is it possible to do short?
Regards,
Srinivasan.
Yes srinivasan,
You can short, but only for intraday. At 3.20pm, it gets bought back if you haven’t bought back on your own. To be able to short intraday without stock in your account, you need to use the product type as MIS while placing your order. The list of stocks that can be shorted for intraday is available on this link.
Cheers,
Sir, I bought 1 lot natural gas with expiry date feb2013 at 192.20. Then the price suddenly fall around 177 within 2 days. Then it was automatically sold by you. What is the reason? Even though validity upto feb 2013 and enough cash in account, why it was sold. my ID DK0313
Hi Velu, As you would have received an email from our end already, the position was squared off because of insufficient margin to hold the Natural gas position. Do reply to the email if you need someone to get further clarity.
Hi ,If we are trading in BTST ,what would be margin for that whether it is similar to the intraday margin or exposure ..or it may vary ?
@karthikeyan, there is no margin provided for BTST trades on equity, you need complete money for holding positions overnight..
In delivery based equity trading, after i sell a stock will the entire amt be available in my limit amt immediately or only after T+2 days? And why no margin for delivery trades? ICICIDirect provides margins for 5 days in equities cash segment.
The margin is available for you to take a fresh position immediately, but if you want to withdraw the funds you will have to wait for T+2 days.. We presently don’t allow margin for delivery trades, but during the course of this year, we will most likely start offering..
Thank you very much for the information. I have a small query about BSE & BFO
1. I am not getting how much margin i need to pay for One lot of Sensex?? Kindly tel me how much margin to be maintained to be kept for overnight position??? 2. BSE scripts how much leverage for intraday??
Hi, Presently we are not receiving the SPAN files for BSE and hence not able to share the details. But for sensex similar to nifty, the margin required is around 10% of the contract value.
How to access span calculator in my ZT
Sathya,
SPAN Calculator is available on this link, if you want to initiate it on ZT read this blog and if you want to know how to use it on the browser, read this.
Does Zerodha has mobile trading platform for MCX?
Yes we do!
span calculator shows me a margin of 11470 for hindalco fut sell and 110 call buy. But when i put a spread order for the same it gets rejected saying that the margin required is around 42000, even though i have bal of 35000. can you explain
Vijay, Yes the margin required for both the positions together is around 11500.. The issue here is that to get this margin benefit you have to enter the position separately and not through spread or basket orders..
So if you short hindalco futures(you will need 35k for this) and then buy the calls, the margin drops down to 11500, but to first short hindalco futures you will need that 35k..
If margin in your account is less, what you can do is that use MIS product type to short hindalco futures, margin blocked will be only 40% of 35k and then buy the calls.. Now go back and convert your futures from MIS to NRML, to know more on position conversion [click here](http://zerodha.com/z-connect/blog/view/zt-position-conversion)
Cheers,
Then when to use spread order window? Explain with example…
Anand, Spread orders is ideally used only when you need immediate execution which is important when placing a strategy involving multiple positions..
So if you buy nifty futures and sell nifty calls, you need both to be executed immediately or get cancelled, otherwise there is a risk that you position is naked.. Use spread orders for that..
can you not make buy or sell cover order entry as a limit order instead of market order. that will enable us to place the order well before the required level is reached. can you consider
Vijay,
Cover order as a product is approved by the exchanges for lower margin requirements because both the entry and stoploss are market orders. Hence we cannot change anything on this, [Click here to know about cover orders](http://zerodha.com/z-connect/blog/view/cover-orders-for-higher-leverage)
Cheers
Can I use the amount kept in NFO segment for trading Currency futures ?
Yes you can..
I have got few clarifications.
1) I buy 10 shares at Rs 10. If the stock goes down I want to place a SL at Rs 8 and at the same time if the stock goes up I want to sell it at Rs 12. Can I place both the orders at the same time?
2) If buy one lot of USD INR at 53.9000 and it moves up to 53.9050 what is the profit I make. (I am not clear how sure on the increase in value)
Moses,
1. Yes you can place both the orders at same time, but make sure that you cancel the other when one gets executed. So if stock goes to 12 and you sell the stock for profit, make sure you cancel the stop loss that you had placed at 8 otherwise if the stock comes down to 8 it will get sold again..
2. In currency price is given till 4 decimal points. 53.0000 and minimum movement is 0.00025. So if USDINR is at 53.0000 it can to 53.0025 53.0050 53.0075 53.0100 53.0125 and so on.
For 1 lot every 0.0025 means a profit or loss of Rs 2.5 , So if you bought at 53.9000 and sold at 53.9050 that means a profit of Rs 5.
For brokerage charges and others you can look at the calcuator..
Hope this clarifies..
Thanks for the info on CDS
With regards to placing the orders.
– F1 to buy at Rs 10
– F2 to put the SL at Rs 8
– What is the order that I will have to place if i want to execute at Rs 12 profit?
f1 limit/market to buy
f2 limit to sell at 12
f2 SL-M/SL to put a stop loss at 8(keep trigger price as 8)
Thanks for the information.
Sir
Suppose I buy 1 lot (1000) of ZINCMINI @ Rs.112 of March 2013 Contract and I sell 1 lot (1000) of ZINCMIN @ Rs.113 of April 2013. The present rate of March contract is Rs.112.50 and March contract is Rs.113.50. What is the Margin Money required for this transaction and how to calculate margin. Please explain.
What you are trying do is called a calendar spread:
Read this for more on [Spread order](http://www.zerodha.com/z-connect/blog/view/zt-spread-orders)
and [SPAN calculator](http://www.zerodha.com/z-connect/blog/view/span-calculator)
For trading option strategies like iron condors, what would be the margin requirement for selling nifty 5600 put and buying 5500 put for the same month and 1 lot each? The SPAN calculator says it is 19249 – but shouldn’t it be less since the short put is hedged by the long put?
Hi Arup,
The margin benefit you see on SPAN calculator, is what NSE asks for, it reduces a bit when you are hedged, but not by much.. Remember on SPAN calculator, after adding both the positions using net quantity, you click on both of them when you click on get SPAN..
Presently for this position the margin requirement I see is : for shorting 5600 puts, Rs 18900, for shorting 5600 puts and going long 5500 puts: Rs 18000.. SPAN goes down and also you don’t require extra funds for buying the 5500 puts..
The reason exchange has to do this is because once you have both positions and if you exit the long puts, there still has to be sufficient margin to hold the short puts, otherwise it is considered a risk.. I guess this problem will get fixed only when exchange approves a product which let’s you enter a strategy in a single click and exit them in a single click…
Thanks for the detailed reply. Is the exchange at all looking to implement such a product in which we can enter/exit strategies in a single click as you mentioned? Do you know of any timelines in this regard?
Hmmm.. We as members have put a request to consider, but exchange doing it anytime soon, doesn’t seem like. When there is a question of risk getting reduced, they are for good or bad tough to change their policies..
Will exchange going to implement such policies like iron condor, vertical spread ? Really looking for this as combined order on single click will ensure less margin and hence less risk.
hmm.. don’t think exchanges can.
Can’t you provide this feature on your own?
A sort of multileg or combination order.
I am not sure if brokers have this kind of freedom.
I do appreciate the kind of system change this would entail even if it was given.
Regards,
Chandan
We don’t have the feature of placing multiple orders at one go yet. We’re working on making this happen; but it’ll take time.
Do You offer Share as Margin concept as in IciciDirect, in this you can use some % (80 to 85%) of your equity positions as Margin money of future trades.
Yes we do, but unlike icici which gives you an interface, you will have to send us an email asking us to pledge stocks.. We will give you margins for the same from the next trading day.. How much margin depends on the stock, some stocks 80% some 60%.. We will put up a blog on this by the weekend, do keep following us on this..
whether we have to maintain separate margin for Equity and commodity segment.
Example Am Having Rs 50000 in Trading account whether possible to buy 1 Lot nifty in NSEFO segment((app Margin of 25000) and Commodity segment (Goldmini 2lots of margin Rs 25000)).
Tuna,
Yes we have to keep separate margins as per SEBI/FMC regulations. The example you have given would not be possible, if you have 50k in your equity ledger you cannot use it to buy goldmini..
Cheers..
When are you planning to introduce cover order for Commodities ??
waiting for approval from MCX.
what is the process for getting extra margins from your side for intraday in commodities ??
say,i am having 15,000 in my account…can i get extra margins from zerodha for intraday..
if so…how much max i can get…
Harsha,
By using the product type as MIS while placing your orders, you will get a leverage of 2 times and this will be allowed till 25 minutes before closing of the market. If you don’t square it off, all your MIS positions would be autosquared off 25 minutes before closing of the commodity markets. You can use position conversion to convert MIS to NRML, once done you will be allowed to hold positions overnight, but you will require complete margins for that.
Read the following blogs:
[Margin policies](http://www.zerodha.com/z-connect/blog/view/zerodha-margin-policies)
[Position Conversion](http://www.zerodha.com/z-connect/blog/view/zt-position-conversion)
Hello Zerodha,
I want to buy 1 lot of NIFTY April 5800 Put(Price of 121.9) and sell 1 lot of April 5500 Put(Price of 21.5). Please note that the put that I am buying is fully covered because of the 5800 Put that I would be holding.
1) What would be overall margin requirement?
2) Can I place this order as limit order, say when I am able to enter the above two contract at 90/lot? If so, How do I do that?
Regards,
Chandra
Chandra,
Presently Nifty 5800 puts are 96 and 5500 puts at 15. To short 5500 put margin required is around 18k, but the combined margin required to short 5500 put and buying 5800 puts is only around 13k.
So you get a margin benefit of 5k on option writing + 5k on buying the 5800 puts, together a benefit of almost 10k.
We offer you a tool called (SPAN calculator)[http://www.zerodha.com/z-connect/blog/view/span-calculator] which is unique and will help you to know the margin benefits even before taking a trade.
You can place orders for both, but the margin benefit you will get only after the position is executed. So if you place an order to short the puts, you will need 18k, but as soon as you buy 5500 puts, it will drop immediately.
So yes place a limit order to buy 5800 puts at 90 and sell 5500 at 15, but you will need separate margins for this, once both are executed your margin requirement drops..
Hopefully this helps..
Taking example of prices that you have listed, to buy 1 lot of 5800 put I need 4800 rs. If I am selling 5500 put at 15 rs I am getting 750 rs back. As long as I have 5800 put, why is there a margin requirement for 5500 put. Isn’t my 5500 put that I wrote completely protected by the 5800 put that bought. Shouldn’t’ the margin requirement actually be 4800-750=4050?
Chandra,
I understand what you are trying to say, but unfortunately exchanges don’t recognize such spreads. The issue for the exchange is once you have taken the position, what if you first square of the long puts? You will be left with short puts with unlimited risk and only 5k margin…??
Hence exchanges won’t let you trade with the margins that you are thinking.
Why cant zerodha put a simple rule at the time of closing the contract. If I try to close the 5800 contract without first closing 5500 put then I am allowed to do that only if I have the required margin to write 5500 Put. If I close both of them in one go, then I am fine. For no additional risk of writing a covered put of 5500, why would you want a margin of close to 13K when 4K is sufficient. I mean I should be able to do three times with 13K in my account.
Chandra, this is not a rule we can put, these are rules set by the exchange. If we collect margin from you which is lesser than what is prescribed by the exchange, there is short margin penalty levied by the exchange.
As a trader, I understand what you are asking for, but unfortunately not possible today on the Indian exchanges.
The only positions that get a margin benefit is the calendar spreads, that is because the calendar spreads are quoted on the exchange. Check this link.
am a new user of zerodh. if i want to trade in bse future of small lot of 5 in intraday future how much i have to pay
Dear sir i am sumit kumar jha i have started trading with your trading account i have some question from you
1>Do you have charge extra money if we are using margin money which is provide by you?
2>I have deposited 20000 rs and traded first time on 18/04/2013 i have earn approx 450 rs but in my account it is not showing as well as my balance shows 19989.89 instead of 20000 why please help me?
1> No, there is no extra charge for using our margin trading facility.
2> Looks like you are checking your balance before the trade process has been done. Friday was expiry of Global contracts and hence there was a delay in the file processing. Please check your account now and you would see the credit, if any.
hello sir,
i have a question on margin. if i buy a nifty future @5500 then about 27500 margin needed. now price goes up to 5600. now if i want to get a fresh sell call do i need more 28000 as margin. or due to hedge i can get any discount on margin?
Tintin,
When you bought nifty at 5500 , 27500 was blocked, if you are selling the same nifty at 5600, you are exiting and for this no margin is required. It is like you are selling what you have bought.
If what you mean is that you are writing/shorting a call option, yes you will get a margin benefit and don’t require 28000. We have designed a tool on ZT through which you can calculate the exact margin benefit even before taking a trade, Click here to see the SPAN calculator.
Hi,
Actually in terms of margin I usually face a problem, for many a times I do not regularly track my margin requirements and which in turn squares off my position, even though I wanted to continue in that scrip.
I have a suggestion, if zerodha even if at some cost, starts to provide us alerts before sometime for our margin requirements so that our position is maintained
Thanks
Tushar
Tushar, sorry for missing your post.. Presently there is no such facility for us to message you, but will bounce the idea of our risk management team and see if anything can be done.
Cheers,
Hello Team Zerodha,
You have been evading answering this for a while. I hope you would own the responsibility of assuring your clients that.they can trade with confidence relying upon margin calculation interface of your trading platform. Please realize that not answering is not an option.
Can you confirm the following that :
1. Your trading platform takes care of stipulated margin requirements when a trader places order in FNO for taking overnight positions?
2. Trader need not worry when your trading platform shows enough acredit balance at the end of trading hours (3:30pm) while the margin statement generated in the evening (around 7pm) shows a much lower credit balance (or even a small debit balance) and next day morning trading platform again shows enough credit balance?
Here by ‘enough’ I mean about 8-10% of total funding available in the trading account.
Thanks & Regards,
Anil Kumar
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,
Hello Zerodha Team,
Thanks for responding!
By ‘evading answering’ I meant actually what it literally means. Same query was posted about 3 weeks back along with a query on algoZ where I also mentioned that Zerodha seems to be ignoring the basics. While answering that query you assured to get back on the margin query but never came back.
I always want to play by the rules. That is the reason I also want that rules are being enforced in spirit and the mechanism to enforce them is not faulty. Helpdesk at one time has said that I can rely only on margin statement. Now that is not just impractical (but unfair too), as positions have already been taken relying on your trading platform.
By ‘enough’ I meant that if I have funded my trading account with 500K, I leave 40-50K unused (at the close of trading hours) to provide for the market fluctuation. The positions are always taken with ‘NRML’ order type. But the strange and worrying part is that while your trading platform shows withdrawable balance of 100+K (at 3:30pm) and also the next day morning at 9:15am, your margin statement shows just about 25K. And, this keeps happening for many days for without any change in the underlying positions. Obviously, this is not due to extreme movements in the stock/index. Snapshots of discrepancies have been sent to compliance dept multiple times.
I strongly feel trading platform (at EOD) and margin statement should reflect the same status (except for situations like T+1 credit, ITM options and violent market movements in between). It would be worth checking your systems for bringing them in sync.
Thanks,
Anil Kumar
My bad, if I missed your previous query, but can you email me your client ID to [email protected]. Now that I have heard your query out, I can see another reason why the margin statement may differ sometimes. Assume that you were carrying options from before, when you sell them, we let you take a fresh position using the same margin, but all f&O settlements happen on a T+1 day basis. So the margin statement for that particular day won’t show the credit you got by selling options held previously.
So for eg, if you 5lks in your account and bought 4lks of options. Tomorrow you sell the 4lks of options for 4lks. We will still let you buy for Rs 5lk, but the 4lks credit will happen only on T+1, day after tomorrow. In tomorrows margin statement we cannot show this 4lks credit because it is not realized. If we have to sync the margin statement with the trading terminal position on this, we will then not be able to allow trade on options carried forward and which is sold.
Hopefully this clarifies, but do send me that email with your client ID, will double check, also let me know which day’s margin statement are you talking about. [email protected]
Cheers. .
Hi,
I have a doubt, if i sell 10k worth options in morning and can i buy options in the afternoon same worth of 10k.
thank you
Yes you can buy back for options worth 10k
Hi,
the CO margin of 25% is applicable for all stock futures or only for the index futures.
Thanks
All futures contracts
Hello,
Your margin policy (ref: back office) is still dated 6 Dec 2011, despite said to be revised effective 21 May 2013
Thanks
Thanks for this, will have this updated soon…
Hello sir, i want to ask that how many margin zerodha gives for intraday trading , suppose i having 10,000 ???? how much u give me margin to trade for intraday…
Mayur,
Depends on what you are trading and the details are on the blog
Can you let me know what you trade?
Scrip “Aloktext” is supposed to give 9 times leverage , but according to Zerodha Customer Care its been diluted to 3 few days back , So my Question is When u gonna Update the IntradayMargins.xls , patiently waiting for it.
Thanks
ok sir i am just a beginner in trading stocks so i dont know much about leverage. lets say i have 25000 rupees to trade then what wll be the leverage if i trade in blue chip stocks like HDFC,BAJAJAUTO,RELIANCE etc???????
Blue chips for intraday will typically be upto 10 times , but if you use cover orders you can get upto 20 times.
To know about cover orders check this blog.
Hello sir, I want information about intraday margin for equity future.
For example if I want to buy Nifty JULY future at 5800 for intraday(MIS) exactly how much margin is require. I am asking this because I dont know wheather it is 40% or 25% of original margin.
If Nifty margin is 23000 for positional, for intraday wheather it is 9000 or 6000. Please clarify this as early as possible.
Thanks.
VMG,
For intraday you can trade using MIS as product type or else you can also use cover orders. (In cover orders you have to buy market price and compulsorily put a Stop loss).
If you are using the product type as MIS then it is 40% of 23000 and if you are using cover orders as a product it is 25% of 23000.
Cheers,
VMGJul 10 2013, 8:25 pm
Thanks sir to solve my query about difference between MIS order and COVERED order and associated margin.
Now I want to confirm only about covered order. Covered order means just an automated order executed as per market rate and stop loss order is also automated calculated.
I want to know wheather CO is place manually, mean LIMIT order for buying (IF Nifty is at 5850 and I want to buy at 5840).
Can I place CO order as LIMIT order ?….
Cheers..
[ Click to thank ]
VMG,
Please read this blog on Cover orders: http://www.zerodha.com/z-connect/blog/view/cover-orders-for-higher-leverage
Explains everything clearly. You cannot place limit order while trading cover orders.
Cheers,
Hello,
I have a question that how to short a stock, means SHORT XYZ JUL FUT@100 TGT 98,97
How to buy/short that stock future and how much margin required for that.
thank you
Tharun,
Check this blog on how to place orders,
To buy and sell futures, add the future to the marketwatch, use F1 for buy and F2 for sell, keep product type as NRML or MIS and place your order.
Margin depends on the future that you are trading, you can see the margin for various contracts as explained in the blog above. If you use MIS you will need only 40% of that margin, but you will have to square the positions off by 3.20pm.
Sir as i am a student so i want to trade with little money. Can i trade with 5000Rs after i learn properly i will add more money to account.?????
If i use margin in my case let my investment is 5000 and i got leverage of 10times then i can total trade for 50000Rs then what interest i have to pay for using margin???????
Answer my questions ASAP. Awaiting your replies
Praveen,
If you are trading on equity depending on what stock you are trading you get 3 to 10 times. So yes for eg you can buy 50,000 worth of reliance with only 5000 in your account. But this leverage is allowed only for intraday trades and you have to square off by 3.20pm otherwise it gets autosquared off.
There is no interest charged for this intraday leverage.
Cheers,
Sir i checked out the margin policies Excel and found that in cover order the stop loss must be 1.5% range. But take this example. If i buy opto circuit at 30 and according to this stop loss should be 29.55 i think (using cover order) and lets say i got 10000Rs then leveraged amount will be 10000×17(as for opto circuit leverage is 17times using cover order). Now i can buy approx 5600 shares. As the stop loss is very near to share buy price if it hit stop loss then i will be losing 2617Rs(i got this answer from your ZERODHA BROKERAGE CALCULATOR PAGE).
All i want to ask is if i use only margin which gives 8times for opto circuit then my total money will be 80000 and i can buy 2600 shares approx. lets say i didnt use stop loss and my target is 30.25 then i will get a profit of 603 approx. It is much better to earn a little than losing a lot. so I want to know if i use only margin( i.e not cover order) then can i use it without stop loss with target price.
can i use target price without any stop loss in margin intraday sqaure off. Ya i know if price fell i will suffer huge loss but as opto circuit is a high volume stock increase in only 25paise is somewhat possible..
Awaiting your reply
Praveen,
Sorry had missed your query,
Yes you can use MIS as product type and you get an option to choose to have a SL or not have a SL. You can choose to place limit order as exit order as well.
Cover orders is for people who need that extra leverage, more than the 8 times that you will get from MIS, for these people only we ask to put SL if using cover order.
Hello,
may i know the margins required for selling stock futures as shown in span margin file or other
and MIS, CO both are applicable for selling future contracts.
thank you
Tharun,
The margin required is as per the file for both buying and selling futures, margin doesn’t change for buying/selling.
Sir i want to know does Zerodha have instant order execution. Lets say i have 10000 shares of IVRCL INFRA which i bought at 15.20 each and a put a SL of 14.60 and target of 15.35. Lets say after 1 hour the price is hovering around 15.35. then according to my target all the shares should have been sold out. but as we know the price of many shares fluctuates even in 1 second so as i have a huge number of share will all my shares be executed at 15.35 atonce or slowly slowly based on market prices fluctuation it will execute.
If all shares get executed when price touch 15.35 at once then i will be gaining 1400 approx. hahaha. Reply please i am curious and waiting
Praveen,
The order at 15.35, the executed will be based on first in first out. So if you were the first person putting the order at 15.35 and if someone comes and buys it at 15.35, then your order will be executed otherwise it will remain pending.
So execution of your order will depend on how many people buy at 15.35, it is the same way with every broker.
Cheers
If i write an out-of-the money option that becomes in-the-money sometime later and i dont have the future margin+30% as required to hold it will it get squared off immediately or will i be given notice to arrange some more margin?
Also how far on in-the-money or out-of-the money must an option be to concider it deep?
Vivek,
When you write an OTM option, when market goes against you the margin requirement will keep going up daily. You will have to track the margin requirement for the option you hold and ensure that you have enough funds to hold this.
The logic of future margin +30% is not correct.
You can use the SPAN calculator to know what is the exact margin requirement at every point of time. Click here to read about SPAN calculator.
Hello,
How to calculate the premium for writing/shorting options
thank you
You mean margin for writing options right? We have a tool for this called SPAN calculator , read the blog.
Usually writing for options is around future margin if you are writing in the money options and it keeps reducing as and when it goes out of the money. See the blog on Span calculator if you want to see the exact amount.
Cheers,
Wat are the margins required for commodity futures?
Vicky,
As mentioned in point 5 in the above blog. For overnight complete SPAN margin as per the commodity margin file and for intraday 50% of that margin.
Cheers
Vicky246 Aug 6 2013, 12:32 pm
I need file containing details about the span and complete exposure margin, amount of every commodity trading in commodity exchange.
[ Click to thank ]
As mentioned in the blog above, you can login to the backoffice and get the SPAN file. This will be updated everyday. You can also use the SPAN calculator for this.
Where can I get the span margin file in Q-Backoffice.
Rohit, the SPAN file can be found on https://zerodha.com/margin-calculator/Futures/ on the top right of the table.
Please check. The link “Equity margin (PDF)” opens a PDF that only has margin for currencies. Need the span margin file for equity option writing. Its a pain to use calculator for every trade.
The file I’ve stated gives SPAN margin for all equity futures.
Where do I get the span margin file for options?
Do you give any margin in niftyoption for intraday ?
For buying options we don’t give any margin, but if you are shorting/writing options using product type MIS for intraday, you will need 40% of exchange stipulated margin.
Please let me know the constituents of Obligation Amount
An obligation amount can either be a debit/credit. Below are the constituents:
Equity Obligation:
*Debit: Purchase of Equity Stocks/ Intraday Loss/ Purchase and Sale of Equity Stock with Purchase Value > Sale Value
*Credit: Sale of Equity Stocks/ Intraday Gain/ Purchase and Sale Equity Stock with Sale Value > Purchase Value
*******************************************************************************************************
F&O / Currency Derivative Obligation:
*Debit: Purchase of an Option Contract/ MTM Loss on Futures
*Credit: Sale of an Option Contact/ MTM Gain on Futures
**Obligation amount posted is after Brokerage and all other statutory charges
Can I use Zerodha Trading platform with Android Jelly Bean for eg: SAMSUNG tab2
Yes it should work.
Hello sir,
I want to know the procedure for close nse f&o trading account (No DP Account).
Currently account don’t have any balance and not in use.
thanking you.
Send us a letter with your client id and asking to close your account with signature. We would do it.
Cheers,
VMG Sep 14 2013, 10:45 pm
Zerodha replyThanks (1) | Sep 14 2013, 9:27 pm
Send us a letter with your client id and asking to close your account with signature. We would do it.
Cheers,
Dear sir,
As per previous response from your side regarding trading account closing please provide address where
to send account closure letter with signature.
Is there any account closing form or only letter with signature is enough ?
Any document is required to attach with letter ?
Thanking you
Just a letter is good enough. Also, the trading account has no AMC or any running costs, not closing an account won’t add any overhead cost to you.
Cheers,
Dear Team
Does margin required for future trading depends upon whether i buy or sell future? e.g. if margin required for buying nifty 1 lot is INR 25000,will it be same for selling 1 lot of nifty future?Ifnot,from where I can find that one? In margin policy, it has been stated that
Once bought as NRML, you can hold the contract till the end of expiry as long as you meet the MTM obligations on a daily basis.
I have sold 1 lot of Mcleord Russel. If i check span margin excel, itsays margin required(not sure buy/sell) is 34685. Now If i check my open position at end of day, it has got 2 columns which is confusing me – clos. Price(13945.95) and MTM value (-13683450.000)
Total MTM value in this report is coming out to be -65671892(i do have other SELLS future also). SO I should infer from this big amount?
rgds
Gyan
Gyan,
Margin required is same for buy and sell.
Yes once bought as NRML, you can hold it till end of expiry.
I am a little confused on this last query of yours, will get someone to call you up and explain.
Cheers,
hi ,
what are the margin blocked for option calendar spread:
1)sell oct 6000 call And buy Nov 6000 call
2)sell oct 6000 call And buy Nov 6200 call
3)sell oct 6000 call (naked call writing)
I do not have access to your software with margin calculator,it will be great if you can post the reply here.
Regards
1. Rs 14270
2. Rs 19009
3. Rs 27951
Cheers,
Thanks for your swift reply,appreciate that.
Can I use my demat holding of 1) stocks 2) Equity mutual funds 3) Debt mutual funds , for margin of option position.
Are there any extra charges for it.
regards
Yes you can give all this as collateral, will cost you around Rs60 in regulatory charges to pledge & unpledge for every stock/MF you hold. But once pledged you don’t have to pay any interest for the money you use for trading options..
Now that I have transferred Mutual funds to my zerodha account & trying to pledge them as collateral , I am being told that it is not possible.Can you please get my MF’s pledged to generate margin.
regards
PS, can you send an email to [email protected], with your client ID, he follow up on this and have this done immediately.
Cheers,
I am already in communication with aforementioned email id .But even after 1 month & dozen emails the mutual fund part is still not happening.can you please help.
regards
one final question.
Can I buy mutual funds through my Zerodha account OR can I transfer mutual funds from other demat account to zerodha account (I know shares can be transferred).
I actually hold quite substantial amount as MF in my other demat account & intend to use it as margin by transferring it to my Zerodha account.
regards
Yes PS,
You can transfer and use it as collateral, but presently the platform doesn’t let you buy or sell MF with us.
Do zerodha maintain any document where user can get the haircut percentage for the stock , mutual fund he wants to pledge.Couldn’t find the link.
regards
Hi Ps, we don’t have for mutual funds yet on our website, but you can see the haircuts for stocks in the download section of our page. You can click here..
thanks for the reply.
-Aforementioned document has list of mutual funds in the end.
-Document do not mention haircut percent for stock/mf
Hi,
If I sell the stocks from my demat holdings, Can I buy back the shares immediately if it comes to a lower price on the same day? Will it allow or should i wait T+2 days to buy the shares once I get cash?
Similarly after selling the stocks from my demat holdings, can I use that money for intraday trading on the same day or should I wait till T+2 days till the cash comes to my account?
Also by default, the intraday chart shows 22 days data. How to make it to show just the current day intraday chart by default? I tried using the template but it doesnt seem to work.
Please answer my queries.
Thanks,
Ganpat
Ganpat,
You can buy back immediately.
You can use the proceeds from the sale to do intraday trading immediately.
By default it will show 22 days and this has been made because of request of a lot of traders. To look at 1 day chart, you will have to zoom into or select by left clicking and dragging on the portion u want to see on the chart.
Thanks for the quick reply. Is there any way to make 1 day chart as default, as I will close and open the charts many times during a trade according to my convenience?
You press Shift + P after clciking on the scrip to open the whole chart. As soon as the chart is open, you press Ctrl + N, this will open 1 day chart.
Does the span margin calculator in Nest , works for currency options.
I tried checking margin for selling usdinr 62 CE , 29 oct 2013 with (net quantity -1) & it showed margin of 5406.
My understanding is for 1000 dollar ( 1 lot ) , it should be around 1800 rs at 3% .
Regards
PS,
The margin for trading currency went up quite significantly, we had sent an email to all our clients informing that. Here is the link of the email.
Cheers,
Hi,
Can I change all my F & O open positions holdings from ‘NRML’ to ‘MIS’ to increase intra day liquidity? These positions might not have been taken on same day….Is that allowed?
Yes you can convert from NRML to MIS and if you want back from MIS to NRML. Check this blog on position conversion
Hello zerodha team ! I’m a brand new customer.
I wish to place a vertical credit spread on nifty options. But am confused regarding the margin requirements.
My account balance is 44000 rs.
I wish to sell (option writing) 4 lots of nifty 6500ce (November expiry) and buy 4 lots of nifty 6600ce (November expiry) to hedge it.
Is it possible for me to do so with 44000 rs margin ?
If yes how would I go about placing the orders ( sell 1 lot then buy 1 lot and repeat 4 times ? )
Also I prefer to trade on my iPad. Is there any app of zerodha for iPad ?
Thanks and regards.
Hey Risk,
The option margin system in India works very differently compared to the developed markets.
When you sell 6500 calls and buy 6600 calls, the risk is reduced and hence the margin required to take this position also reduces, but not to the extent u r expecting.
If you want to naked short 6500 calls Nov margin required is 21200 and to buy 6600 another 1500. If you take both the positions together the margin required is around 19700, so around 15% margin benefit.
So the example you have given, you can take position with 2 lots.
You can use our SPAN calculator for the same.
For IPAD you can use Z5, our HTML5 platform.
But theoretically maximum loss = difference in strike price- net credit received. So why does the exchange require a larger margin ? Is the margin benefit only 15% in the case of iron condors also
Theoretically yes, but there is an execution risk while taking this strategy. What if you exit one and not the other once taking a position with lesser margin? Unfortunately other than calendar spreads you cannot trade any other spread directly.
You can try the SPAN calculator to know the exact margin benefit.
Hi,
I am already a client for only trading in FNO. I am interested to do Intraday trading in NSE equity but its not showing in segment. how to add it ?
secondly,
I want to trade using Zerodha trader in NSE equity (no deliveries) in this case how to get userid for same and what will be margin? as i have heard of that in ztrader the margin is more as compare to NOW.
pl reply.
thanks
Sonu,
If you are not seeing the NSE segment then it means you didn’t open a demat account with us or didn’t link any other existing demat of yours. So you have 2 options for this:
1. If you have any existing demat account, send us a copy of your demat client master report( the statement which carries your Demat account number and your name) requesting to map to your trading account. Once this is done, you will automatically start seeing the NSE equity segment and you can start doing intraday trading in equity.
But note that if you link some other demat of yours, you will be able to buy stock for delivery, but you will not be able to sell that through us, you will have to sell that with the broker with whom u have opened the other demat account.
2. If you want to trade delivery based as well, open a new demat account with us. You can call the sales executive who helped u with the trading account or call on 080-49132020 for this.
margins on ZT is actually similar to NOW, ZT also gives u the option of cover order whereas NOW doesn’t.
sir,
In futures we actually get Margin and we do not square off positions intraday. Can you tell me what is the interest rate that amount you give us on margin attracts. Thanks in advance.
Ashu, Futures are inherently leveraged and there is no interest that you have to pay to hold that position. Check this link: http://zerodha.com/margin-calculator/Futures/ for margins required.
Hi ,
Suppose if i want to trade in SBIN NOV FUT series intraday…what will be the margin requirement is it 40%of 28586 or 40% of(Span margin+Exposure Margin) ..i.e 36.500
Please clarify
Bharath,
have you checked out our Margin tool? , has list of all futures with NRML(overnight) and MIS(intraday Margins).
If you use the product type as MIS for trading intraday, the margin required is 40% of (SPAN +Exposure).
Cheers,
If I Sell Call Of NIFTY And Tomorrow If Markets Open 20% Up.What Next.You Just Take 10% Margin .
Ronak,
Risk of running brokerage business, whichever part of the world. 🙂 , The reason why we as a brokerage are very conservative in terms of leverage and usually the margin required keeps going up with increase in volatility.
sir,
i just want to short 6600 ce and 5700 pe of dec expiry just targeting premium recievables. my doubt is that whatever required margin at the time of execution of trades is just enough to hold the positions till expiry date or i need to keep my margin requirements updated daily ?
Renjith,
Firstly I hope you are using our SPAN tool for calculating option writing margin, here is a blog on how to use it.
When you write options since the risk is unlimited a margin is blocked and similar to futures this is marked to market and hence need keep your margin requirement updated daily. So if the position starts going against you, you would have to ensure that the minimum required margins are present.
Hi Nithin, Instead of blocking such a huge amount as margin, can you provide something like setting a global SL % on options sold. For e.g If I set it to be 10% then as soon as the price goes beyond 10% system can trigger buy and one needs to just keep required money to sell it at LTP + X% as per his/her choice…in current scenario even if you are selling far ends of the strikes systems blocks unreasonable amount.
Sachin,
We are among a select few brokerages who block the lowest margin for option writing for overnight position because we settle with exchange on T+0. These margin requirements are as stipulated by the exchanges, and not really in our control. Also, I get your point of SL and etc, but as you know when blocking margins exchanges have to think about the worst case scenario, is the margin enough if there is a drastic movement in the underlying, which probably happens once or twice every few years. It is important to not compromise on this risk as both exchange and us as brokers.
Yeah, you are right Nithin, I was not considering gap openings and as a broker one must have safe margins. Still have one more question, on a day like general election results when markets hits double circuits, how do you ensure margins?
The exchange SPAN margins usually go up around news events to cover for the risk, but one of the risks that brokerage run as a business is that nothing can be covered 100%, and hence it is better to be safe than sorry.
I have pledged shares worth 6.5 lacs with you. You Still Require 30% Cash margin over and above the shares pledged to let me trade. Though I understand the logic of asking for a balance I still dont understand why you cant let me trade. If there is an MTM at EOD and I do not pay in you have enough stock with you to close the position the next morning.
Manoj,
We have been a little conservative on this side, but we are changing the policy of keeping 30% as cash margin to only 10% as cash margin in the next few days. One of the reasons for asking for this cash margin, is because selling a pledged stock is the last resort we want to take.
Can you email your client ID to [email protected], he will update you as soon as the new margin policy is in place.
Cheers,
thanx for the prompt reply.
If I buy 10 Lot of Nifty then u ll charge rs 20 m i right.
Yep, correct Ronak!!!
Sir I am a client of Zerodha and want my ledger balance for a particular fy like 2013-2014 or for any specific period than how can I get that
Surender,
Login to bo.zerodha.com using internet explorer, all your historical reports will be available there.
Sir I have a Demat account with another broker and having only trading account with Zerodha and I am having soft copy of the said demat account detail, Further how can I link that account with my trading account at Zerodha with that soft copy details.
Surender,
Take a print, sign, and send the demat account details to our office in Bangalore asking to map it to your trading account. This will be mapped to your trading account, but do note that when you buy stocks at Zerodha it will go to your demat, but while selling you will have to sell with the same broker whose demat you map.
Thanks for the reply but can I trade with demat of other broker in Zerodha on intraday in equity trade
Yes you can trade intraday equity. Also you can trade futures and options for both intraday and overnight.
Cheers,
Hi
Have Pledged shares wortth Rs 6.5 L Haircut about 5.5 L.Cash balance of about 50 K.
Kept an overnight position which requires a margin of Rs 60 K. This has now been debited to my running account and the balance has gone into negative.
Shouldnt only the margin be debited to my collateral account and any MTM ( profit or loss) should be transferred to my daily running account.
sir i have seen today your web site zerodha i am interested how much times expose giving for mcx intraday and you given permission multy trade terminals pls give me repply as well as soon thank you
Ganesh,
We give 2 times leverage when trading MCX for intraday.
Hi Nitin, as stated by you in jan 2013, zerodha going to start leverage for delivery in Equity likewise in margin at present (e.g. Icicidirect T+5 days).
its almmost end of the year now, when can we get it?
hi Nitin, i have 30000 cash margin in my account , then how many lots of mis crude can i trade….
You can trade 2 lots of Crude Intraday with Rs.30,000 in your account.. You can look up for margins for Intraday(MIS)/Carry Forward(NRML) here: http://zerodha.com/margin-calculator/Commodity/
ok can i trade 10 lots of crude with 1.5 lacs cash margin for intraday
Hi Nitin, as stated by you in jan 2013, zerodha going to start leverage for delivery in Equity likewise in margin at present (e.g. Icicidirect T+5 days).
its almost end of the year now, when can we get it?
i m loosing money in MIS….
Deepak, leverage for delivery based trades is not something which is in our priority list right now. We will think about giving leverage for delivery based trades when we have a DP of our own.
My advice to you is to figure out a good system for trading intraday. Or if you feel your position will make money in a couple of days instead of on the same day, you can trade futures which is already a leveraged product that can be held until the expiry date with just a fraction of the amount.
hi nithin, i understand a cover order has more leverage then a MIS order.
then why is the margin calculator for currency showing a higher leverage for MIS order over the cover order?
Thanks for pointing out, should be fixed by EOD.
Can u please tell me what is the square off timing for delivery based shares which I had purchased yesterday?
Is the square off timing is same for all traders or different for brokerage firms?
For delivery based shares, there is no concept of square off. Once you have paid full money, you can hold for as long as you want.
only the stocks mentioned in this list can be traded in intraday?
http://zerodha.com/margin-calculator/Equity/
i mean is this a sample list and the actual list has many more stocks or
this is the current list which gets updated based on market conditions?
This is the real list and only stocks on this is available, and updated on market conditions.
So other stocks are not available for intraday or margin is not available on them?
Do you have the option of BTST?
Do you provide margin if i sell the stock before delivery (t+2) or am i not even allowed to sell?
Can i have 2 demat accounts? 1 existing and 1 with zerodha?
Sunny,
yes, stocks other than on that list is not available
Yes, we provide BTST facility, check this blog: http://zerodha.com/z-connect/queries/stock-and-fo-queries/btstatst-buyacquire-today-sell-tomorrow
Yes, you can sell before delivery, and the margin is released, but do understand the risk in BTST.
Yes you can have as many demats as you want, but you can’t have 2 with the same broker.
I came to know that one can pledge Mutual Funds (ETFs and non ETFs) with Zerodha now. If this is true, can you please let me know how this can be done?
Yes Kailas,
You can pledge MF’s and ETF’s, you will have to send an email request to [email protected] asking to pledge the quantity of MF or ETF which is in your demat account opened with us. You can send an email to [email protected] with your contact, he will get in touch and help you out with the same. We will soon have this put up as a post.
Cheers,
Nitin, thanks for the prompt reply. I will get in touch with [email protected]
hi
I wanted to intiate a strategy in Nifty options.I would be carrying the position till expiry.So I wanted to know that the margin required would be the one which is shown in span margin calculator after the margin benefit.Will I get Margin benefit or not??Actually I wanted to send you the screen shot of the span margin calculator which I had calculated for my positions.How do I send it to you?
You can email me the snapshot to [email protected]
But yeah, margin required is what is Total margin mentioned in the SPAN calculator, check this blog: http://zerodha.com/z-connect/queries/stock-and-fo-queries/zerodha-span-calculator, will answer all your queries on SPAN calculator
Hi:)
I have another crazy doubt.
Assume I have 1 lac rupees in my zerodha account.
Assume I am doing only intraday trades.
Now I want to take an intraday position in 1 stock which has a MIS margin of 3x.
So I will be able to do intraday for 3 lacs worth of shares, Correct?
……………………………………………………………………………………………….
Now is the crazy part:
Suppose I have spotted another 2 shares that also have an MIS margin of 3x each.
Now instead of trading 3 lacs(3x) worth of shares in 1 stock,
can i trade 3 lacs worth shares in 3 stocks(1x * 3=3x)??
I will be trading 1x in each of those 3 shares with the same 1 lac investment.
In either case I will be trading an amount worth 3 lacs in total.
In that way I could average my risks and stay in assured profit and also generate more brokerage
for Zerodha :p
sorry if this is a dumb question but this option would be really helpful:)
1st part: Yes
2nd part: If I am getting your question correctly, yes you can buy 3 different stocks for Rs 1lk which has 3x margin.
Let me tell you how it works, assume you buy 1lk of first stock, if it has 3x leverage, around 33k is blocked in your trading account. You still have 66k left that you can use anyway you want, trading 3x stocks, 5x stocks or whatever.. 🙂
i want to know how is the volatality of Gold Regular Near month contract. if i trade in 10 contract on intraday basis , will i be able to square off my position easily. i mean are there enough traders available.
secondly, does Zerodaha execute my large order in one go or does it square of few contracts first then again the rest, like in batches.
thanks
Puneet,
Gold near contract is pretty liquid, and you should be able to trade all of them at one time. With Zerodha the order limit on big gold is 10 lots, what this means is that you can execute 10 lots at one time, you don’t have to break it into small orders. But if you have to place 20 lots of gold, you will have to place 2 orders of 10 lots each.
Hopefully this clarifies.
Cheers,
A couple of questions.
1. How do I transfer Mutual Funds to Zerodha account. Which MFs can be transferred?
2. How do I pledge them after they are transferred?
You need to first transfer it to your demat account opened with us, once it is in the demat send an email request asking to pledge the MF. Email request is good enough. You can transfer most of the MF’s.
hi.
I want to do intraday trading.
can i place the buy and sell order with limit price at one go?
or i need to first place buy order at market price and later the sell order with limit price?
You can place a limit buy and limit sell at a same time, but you would require 2 times margin. But if you enter using market, and put a limit to exit, then you need only one time margin.
Hope this clarifies.
thank you.
could you please help me with the selection of the options in the drop down list while placing the order as you said using market and putting a limit to exit ?
swetha, I guess it will be best if I can get your client ID so that someone from our support can call and run a demo for you. It will be easy for you to understand. Can you send your client ID to [email protected]
Cheers,
It’s helpful
only the thing that you hav to provide for zerodha clients is Sure tipz for weekly calls will be good for un employees.
will zerodha ever give leverage for delivery trades?
We might in the future, but no plans as of now. Presently if you need any leverage, we can help you setup a margin funding account through our Demat partner ILFS, after which you can use the additional leverage for both F&O and delivery trades.
Hi Nithin,
I have a small query about option writing.
For example: Today @ 11 am I sell Nifty 6300 put for 100 rs.
Today it closes of Rs.120. That means i have to pay 1000 rupees from account to maintain the margin before next trading.
Again next day , It closes to Rs. 110.
That means. I have to pay again 500 or 500 will be added to my account compare to previous close.
Are you getting what i am trying to convey?
Please clarify me.
Margin would be detected from the date which i write the option or the previous close of the day .
Nithy,
In option writing,
When you make a loss, margin required increases, and when you make a profit margin required reduces. So if price is 120 and then today closes at 110, the margin required will reduce.
Margin required is reduced/increased based on the price at which you would have shorted the option and not based on previous day close
Thanks lot for quick reply. That means again i should have to pay 500 rupees for the closing of 110 again on the next day.
No Nithy, if the price was Rs 120 the previous day and today it closes at Rs 110, you are in a profit of Rs 500, so you would not have to pay, Rs 500 will be credited to you.
Is the same process for Future selling also? But i read the article. If i sold for Rs. 100 next day it close too Rs. 80. I have to pay 20 rupees from my pocket. and after the day its closes to Rs. 75. I have to pay only 5 rupees from my pocket compare to previous close
What is logical behind in this? Why should not i have to pay 25 from account. only 5 rupees.
Nithy,
Futures have what is called as daily marked to market. So assuming you sold at Rs 100 and today it closes at 80, R 20 is paid to you as profit. Next day if it closes at Rs 75 you get paid Rs 5 because you again make a profit (since you are short, you make money when market goes down). If assuming the next day it goes to Rs 85 ( since you are short, u lose when market goes up), you have to now pay Rs 10. This process is called Marked to market.
can auto-squared off time be extended further.
3.20 is already quite close to 3.30, and we will need 10 mins to be prepared for days when there might be issues with auto square offs.
Hi Nitin ,
If I Buy any shares with NRML type, and not sold on same day, then
1) How much money will be deducted from my the savings account linked?
2) and next day if Sell those shares agian using NRML type, how many days it would take to get the settled amount to be credited to my account?
3) would ther be diffrences in brokerage charge when we buy Equity first dat with NRML type and sell it on on next day again with NRML?
Akash,
Firstly, if you want to buy stocks for delivery, u need use the product type as CNC and not NRML. NRML is for trading F&O on overnight basis.
1. The money has to be first transferred to your trading account from savings, before you can purchase.
2. When you sell next day, money will come to your trading account in 2 days after you selling if you want to withdraw, but if you want to buy something else, you can do the same day.
3. Brokerage at Zerodha is Rs 20 flat per executed order or 0.1% whichever is lower for delivery based trading, so it won’t change.
Hi Nitin,
Thanks for the quick reply, Currently I am holding an account with diffrent campony demat account, I wasnted to verify the charges they are doing, so that I can close the account immdeialty if ther is any thing wrong.
On thursday(10th april) I had bought 700 shares of compony (per share is Rs 197) with NRML type , on same day I could not square off all the shares that I bought( in last minute I had kept sell order with market price, in which 363 shares transaction is not completed), When I check my linked saving account next day(11 th april) they have deducted around 12.5 k rupees from savings account, and next day I have sold the same shares with NRML type(363 which was pending from last day at Rs 198, I had called up customer care to know which type I should be selcting to sell the shares that are penidng on previous day, that asked me sell with NRML type),
however on next day i.e on Saturday from my saving account around 71.5 k rupees is dedcuted ( which I belive 197*363). Today since it is holiday for Bank and tradinng I could not connect to their customer service to know about the deduction.
My question was ,
1)What could be the amount 12.5 k which was dedcuted from savings account linked on first day
2) when I inquired couple of weeks back for NRML type, Cusomter service guys said if u dont sell shares on same day there will be some percentg of amount will be held (around 10%) , if so then next day why the complete amount 71.5k is again taken from savings account, why not around 59 k , if it converted to CNC (i mean 71.5 -12.5 = 59 k)
3)Since I have sold the pending 363 shares at the price of 198 ( (363*198 =71874) + 12500 = 84374), should I get the 84374 k amount back into my savings account by Tuesday/Wednsaday ?
I know it is long story , however I wanted to Confirm what they are doing is correct if not I need to close account immdiately to save my hard earning money.
Thank you in advance
Regards,
Akash
Looks like the brokerage you are trading with is either a bank or else has POA on your bank account also as money is directly debited from your bank account. It will not be possible to comment on the process followed by the other brokerage, it will be interesting if you can fill us in, once you have the complete details on this in the next few days.
Hi Nithin,
Suppose I have 50000 Capital. I purchase 1 lot stock future for 30,000 and 1 lot Put option of same stock as a hedge for 10,000 and 10,000 cash left. What will happen when stock fall by 10% next day. Zerodha will trigger selling my future at what price.. will it will be sold after loss of 10,000 in future as after that margin requirement will break or will they keep counting my Option value as margin as well. so Is it possible that it won’t be sold, if option price increase significantly and generate enough profit (>=loss in future).. Please explain.. Thanks!
Firstly if you are buying futures and buying puts, you will get a margin benefit, you can use our SPAN calculator to see that.
If you start making loss on Futures, there would be a notional gain on puts, so we will wait as we understand that puts are hedging your position is above the SPAN required (not the SPAN + Expo, but only SPAN) for this, once it goes below that we will probably square off.
Thanks Nithin!
Hello Nithin,
What will happen if the position starts going against me and i don’t maintain the required margin?
If my understanding is correct – Once i fail to maintain my margin below 80% of requirement, my position will be automatically squared off?
Can you please confirm my understanding?
Thanks
Yes, typically at 80% of requirement is when you will be hitting the SPAN margin levels, and yes we will square off once the margin goes lower than this.
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
Sukesh
Yes to both your questions, when the margin goes below 80%, it is not a guarantee that we will always square off positions, if we see that the positions are hedging each other (like in your example), we would probably wait for longer to help our clients out.
Thanks.. Also i have read in some places that when losses reach 80% of capital the position would be squared of automatically. Can you please provide some clarity on this aspect?
Thanks
Sukesh, the rule of squaring off positions would depend completely on market conditions, so it will be tough to put an exact number on this. What I’d say is if the margin required drops less than SPAN (around 60 to 70% of the total margin), our RMS team can square off the positions.
Hello Nithin,
One more question. I’m observing that the margin requirement in Nifty F&O is constantly going up.
Earlier i was usually able to write a Nifty straddle (Selling/Shorting both Put & Call at the same strike price) for about 35k (After considering the proceeds i receive for selling the straddle). However now the requirement has come up to 50k.
Is this a temporary phenomenon due to increased volatility because of upcoming elections OR is it due to the fact that Nifty is trading at very high levels now?
Can you also please let me know the factors on which the margin requirement depends on?
Thanks
Sukesh
Yes Sukesh, there are two things happening, Nifty is up almost 12% in quick time and margin has also gone up by the same quantum. Secondly, with the expected increase in volatility, the margin requirements have also gone up, and probably will go higher closer to election results.
Hopefully this clarifies.
Thanks Nithin, That Helps..
Due to higher requirement of Margin these days i’m finding it difficult to trade. Will the margin requirements go down once the perceived volatility stabilizes?
Also will the price level of the underlying play a role in the margin requirement? (Because i feel whenever Nifty is on high levels the margin required too are at high levels).
If this is the case it would be difficult for traders like me to arrange the margin amounts if the Nifty goes higher – Any suggestions to overcome this hurdle?
Thanks
Yes, of course when the price of underlying goes up, margin will also go up.
Nifty at 6000 , contract value 3lks, margin required @10% : 30k
Nifty at 7000, contract value 3.5lks, margin required @10%: 35k
Usually when the margins go up significantly, exchanges will reduce the lot size, for example when nifty was at 3000, the lot size was 100 and today at 6000 odd it is at 50.
Thanks for the reply but that’s a kind of bad news for my strategy 🙁
I’m not able to trade due to high margin requirements these days.
My assumption was that whenever the price of underlying goes up so does the margin required to trade in that underlying however as the margin required goes up.
My rationale was that the average margin required (i.e, Margin – Premium i receive for opening the position) should have been constant because if margin required goes up so should the premium i receive thereby almost nullifying the effect of increase in margins.
However this logic doesn’t seems to be working these days. Am i missing something here?
Hi, For CNC trades it’s bit disappointing not have any margin at all, I am a offline investor and put multiple order after market closing at low prices , if I am lucky I get my order executed next day. Now just to place a order I need to have money upfront !! Is something can be done for this?
We have a plan for this, but might take a while.
Please try to implement some margins against overall DP holdings for delivery trades, I have many blue chips shares in my DP but not able to take any advantage of the same.
Prashant, all you have to do is send an email to [email protected] asking to pledge your stocks, and we will provide you the margin based on haircut mentioned here: , for every pledge/unpledge there would be a cost of around Rs 60/scrip immaterial of the quantity.
me also facing the same problem
since having scrips for more than 2.50 lakhs rupees in the cash account
not able to buy even for shares for rs 25000.00 intraday or delivery base
rather it should be allowed
this one day or two days leveraged should be adjusted against cash or funds transfer or cash position squared off on third day
this type of facility should be there
ie margin against stocks in the account
I have another account with IIFL they allow such type of margin trading and with this we easily built up our portfolio easily than with Zerodha
I wish and request Zerodha to provide such facility
regards
akveenu
hallo!
I appreciate the care and precautions you are following. I have one query though on how are planning to address this.
We observe that when there is a panic in market and particularly when we see lower circuit or upper circuit, most of the brokers disconnect their terminals due to their own mistakes on margins. I saw only one of my previous broker terminal on.
Can you assure that such thing wont happen here. Otherwise we can take positions accordingly in other accounts.
I hope you will understand the seriousness of my worry and not misunderstand me otherwise. Please pardon me in that case.
As you would have seen we are very conservative in terms of risk, and we don’t get into any margin funding activity which usually causes trouble to most brokerages. Also our margin utilization levels never exceed 60%, much lower than average levels of utilization at other brokerages.
Thanks for reply. I appreciate. I was told about conservative approach by your team when I approached Zerodha. This made me feel secure.
For getting doubly sure I asked this.
Hence I shall consider then you are assuring us that such things wont happen here.
Hello,
My assumption was that whenever the price of underlying goes up so does the margin required to trade in that underlying in F&O, however even if the margin required goes up the average margin required OR cash required to trade (i.e, Margin – Premium i receive for opening the position/Writing Options) should have been constant because if margin required goes up so should the premium i receive thereby almost nullifying the effect of increase in margins.
However this logic doesn’t seems to be working these days. Am i missing something here?
Sukesh, when an option position goes against you the premium goes up which gets credited to you, but in essence this is a loss. So the margin blocked has to go up atleast by how much you have lost the premium, but the deeper the loss gets the bigger your position becomes and hence the margin required to hold this position goes up more than how much the loss you are incurring on the option position.
Hi Zerodha,
Currently MIS product in commodity requires only 40% of Overnight Margin.My suggestion is that the 40% limit may be little bit reduced (My Expect is may be 30%).It will give more opportunity to investors to trade and make good return.Other option is you may reduce this limit on request basis from the client. I agree that High leverage result in High Profit as well as High loss.Buy Disciplined Investor can efficiently use this leverage.
Hello Nithin,
Can you please confirm if the below points are correct:
1) SPAN margin is the compulsory margin that is required to take a position, without maintaining the SPAN margin i can not take OR sustain a position.
2) After taking a position, i can keep my position even if i fail to maintain the Exposure margin required (May be because the position went against me after i took the position).
3) After taking a position, if the margin i maintain goes below the SPAN requirement, my position will be immediately squared off.
Thanks
1. Yes
2. Yes
3. Yes
🙂
Hi Nithin,
Thanks for your confirmation, that gives me confidence that my understanding is in the right direction.
My next Question is regarding my Point # 3 – “After taking a position, if the margin i maintain goes below the SPAN requirement, my position will be immediately squared off.”
Question: How frequent is my margin requirement calculated? Is it real time or at the End of the day?
Like when is it determined that i am falling short of required SPAN margin so that my positions are squared off automatically?
Thanks
It is real time, and unless the market is very volatile most square offs would happen between 3 to 3.30pm. You can see the SPAN margin requirement on the trading platform itself after taking the position, and if you want to know the requirement before taking a position you can use our SPAN calculator.
Thanks again.. That leads to my next question again (I know i have lots of questions and might be bugging u.. )..
If i have a mixture of F&O instruments open in my account and the positions start moving against me, then which one will be squared off? Will all my open positions be squared off at the same time?
For Example, i have 3 open positions A, B & C.. I had sufficient margin when i opened these positions however as time passed it went against me and the margin requirement started to increase and the funds in my account were eventually not enough to even fulfill the SPAN requirement..
Now once the margin maintained drops below the SPAN requirement, which of my positions will be squared off first? A, B or C or All my open positions?
Sukesh, if we had to pick one among 3 open positions to square off, the RMS team would typically pick up the position which is making the highest loss. But all 3 positions won’t be squared off at one time.
Thanks.. The main reason for my confusion is because i am thinking which of my positions would be squared off if each of my positions are supporting other positions?
Say i have shorted a CE and a PE at the same strike price & going log on a future of the same underlying? Since each position is supporting the other 2 positions in some way how will a decision be taken on which position should be squared off if i am not meeting SPAN requirements?
Thanks
Sukesh, if you are holding positions that hedge each other, the SPAN margin would come down, check our SPAN calculator for the same. But yes, it is best that you are always on top of your account and square off positions that you want to, before our RMS team does it.
Hi Nitin
Have a query regarding spread benefit. I have bought say 200 sep2015 nifty futures and after couple of weeks would like to hedge part of my position. So I would like to sell 100 oct2015 nifty futures. I know I need to provide the necessary margin required for the sell order. After my sell order is executed, would I get spread benefit as I am hedging part of my position even though mine is not a spread order?
Yep you get a huge margin benefit by taking the spread position.
Hi Nithin ,
Why the margin limit is decreased from 9x to 6x.
Volatility expected in the markets with the results day after tomorrow, we have to be safe as a risk management team
So Nithin
When can we expect the intraday margin back to 9x..?
As soon as the volatility dies down after tomorrow, once the news is out.
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.
Hi Murtaza,
When you short an option, only margins get blocked. There is no “Mark-to-Market” that happens on a short option position. Assume you buy a Nifty call option at Rs.100, and if on that day it closes at Rs.120, you will NOT be given credit of the Rs.20. The credit is realised only if you sell and close the long option position. Similarly if you short an option and are in profits, such notional profits will no mark to market. Only realised profits reflect on your ledger for options. Mark to Market happens only for Future positions.
Hi Mr. Madhav,
What about losses on short options ? Are they deducted from from our account ? Because if I have executed a spread order, the loss on the short contract will be compensated for by the profit on the other contract.
Awaiting your clarification.
Regards,
Murtaza Telya
[…] Before we go ahead with this topic, please read this blog on Margin Policy. […]
Dear Sir,
Good Afternoon!
I furnished the details below. I request your good-self to clarify the same pls. Based on that I will workout a strategy for real time trading.
Chosen Scripts for Trading: CNX NIFTY FUTURE
Mode of Trade: INTRADAY (Either Buy & Sell Or Sell & Buy)
Capital Investment : Rs.1 Lakh
Risk Management Upto: Rs.20,000 (In a day)
Pls. clarify:
a) I would like to square off @ 3.00 pm, Is there an option like automatic square off?
(Can I use it for either Buy & Sell OR Sell & Buy)
b) What is the Maximum Qty that I can trade at one time in a day? How to work it out?
(Is it based on the Risk Management value or Capital Investment value)
Pls. explain with example….
c) Dealer’s Exposure in details for Intraday?
Pls. explain with example….
d) Overhaul Maximum Trading Qty (Including both My Capital + Dealer’s Exposure)
Pls. explain with example….
e) If Margin is applicable means, What kind of margin? How much do I need to pay? What I suppose to
do?
f) How much brokerage, Taxes & Duties & Other Charges?
Pls. explain with example….
g) Is Break Circuit applicable in CNX Nifty Future? If so then how to manage it?
Will Automatic Square off works, during this time or not?
Thanks in advance,
Kumar.
sir cud u pls write a post on pledging mutual funds to provide collateral margins and how to accomplish this process online with minimum charges?
this would be beneficial to most of ZTraders as one can earn more or less constant interest on at least 70% of capital by investing in liquid funds.
sir will u provide mutual fund trading in future?
Ashish, presently we are accepting only stocks and ETF’s. Yes we will start mutual funds very soon.
this is how it works for stocks and ETF’s
Zerodha gives margin to its clients for the securities held in their demat account. The way it works is, the shares would move from your beneficiary account to our (Zerodha) beneficiary account through an Off-Market transfer which you have to initiate and in turn these stocks would be moved to the margin account. We would then provide you margins against these shares after considering NSE VaR margins and your limit would be enhanced on your trading platform. Whenever you wish to not receive these margins, you can just send us an email request to withdraw the securities held in our beneficiary account and we would in turn move them to your beneficiary account. The whole process would cost you Rs 60/- per line item regardless of the size of your transfer/scrip.
Please note that at all times you would continue to remain the owner of the securities that you have transferred and hence would be eligible for all corporate benefits, whatsoever. Such corporate benefits would be passed on to you.
Please note that Collateral Margins can be used only to take positions in F&O Segment and not any other segment. Every broker does this as a value-added service and not necessarily as a money making process. We understand that not all clients can bring in cash to trade and since securities are assets, we could give margin against such assets for the client to trade.
**To avail collateral margin facility on your holdings, you need to transfer the shares to our beneficiary account. As soon as the shares are transferred, you’ll get margin against those shares after the exchange prescribed haircut. For example, if you have stocks worth Rs. 100,000 in your account and if the exchange prescribed haircut is 15%, then the collateral value of your stocks will be Rs. 85,000.The Cash-Collateral proportion in your account for the position held by you will always be calculated in the ratio of 10-90. Accordingly, to utilize the entire 85,000 collateral benefit you will need to have a minimum cash margin of Rs.9444/- (85000*10/90).
thnx for prompt reply,
i hope u will provide mutual fund trading very soon and also allow it to use as collateral.In this way whole process will become seamless as stocks.
thnx for prompt reply,
i hope u will provide mutual fund trading very soon and also allow it to use as collateral.In this way whole process will become seamless as stocks.
is it possible to use margin intraday square off product without using the margin product that is only using our actual amount only
If you use MIS you get margin by default.
Nithin sir , supoose i am using MIS product in intraday trading and places a limit order ,(buy at 100.10 rupees and sell at 100.60 rupees ) and as there is great fluctuation in stock ,how much time share has to stay at my specefied price for its execution.
Nishant, Check this.
sir,i want to open trading account with your company , please tell me the formalities and sir in MIS product leverage is provided in stocks , whether your company charge for the leverage provided on the actual amount and is yes then how much and can i trade in a single stock for many times in a single day
Nishant, either call us on 080-49132020 or visit our website and leave your contact details here for a call back http://zerodha.com/open-account, someone will call back and help you out.
We don’t charge anything for the leverage provided for intraday.
suppose a limit order is placed sir and it is submited to exchange for confirmation ,after submittion and before confirmation can a limit order be cancelled?
No
thanks sir for your reply ,sir if i placed a buy limit order 87.20 and my order did not get executed due to price time priority principle ,but if price of share falls below 87.20 (suppose on 87.10),whether my order will get executed immediately or again that price time priority principle apply on this.
if price comes below 87.2, that means all limit orders would have got filled at 87.2, only then will the price move lower. So that means if price goes below 87.2, you can be rest assured that your pending order is executed.
Dear Sir,
Good Morning
I furnished the details below. I request your good-self to clarify the same pls. Based on that I will workout a strategy for real time trading.
Chosen Scripts for Trading: CNX NIFTY FUTURE
Mode of Trade: INTRADAY (Either Buy & Sell Or Sell & Buy)
Capital Investment : Rs.1 Lakh
Risk Management Upto: Rs.20,000 (In a day)
Pls. clarify:
a) I would like to square off @ 3.00 pm, Is there an option like automatic square off?
(Can I use it for either Buy & Sell OR Sell & Buy)
b) What is the Maximum Qty that I can trade at one time in a day? How to work it out?
(Is it based on the Risk Management value or Capital Investment value)
Pls. explain with example….
c) Dealer’s Exposure in details for Intraday?
Pls. explain with example….
d) Overhaul Maximum Trading Qty (Including both My Capital + Dealer’s Exposure)
Pls. explain with example….
e) If Margin is applicable means, What kind of margin? How much do I need to pay? What I suppose to
do?
f) How much brokerage, Taxes & Duties & Other Charges?
Pls. explain with example….
g) Is Break Circuit applicable in CNX Nifty Future? If so then how to manage it?
Will Automatic Square off works, during this time or not?
Thanks in advance,
Kumar.
a. Auto square offs happen at 3.20pm, if you use the product type as MIS while placing trades. You can’t specify a time other than this.
b. margin for Nifty is 30k if you are using NRML and want to hold it overnight. So with 1lk you can trade 3 lots.
if you use product type as MIS instead of NRML, you can trade for intraday with 40% of 30k, which is around 12k. So you can trade 8 lots, but everything gets squared off at 3.20pm.
if you use Bracket or cover order, your margin requirement will be based on the stoploss of every trade. But will be around 10k, you can trade 10 lots, again square off at 3.20pm.
Check out our SPAN calculator.
c. No concept called dealers exposure, the above rule is for everyone.
d. Not applicable.
e. poing b explains the same, you need to have Rs 1lk in your trading account, that’s it.
f. Check out our brokerage calculator and charge list.
g. Didn’t get what you meant by break circuit .
hai what is the maximum margin that is provided by zerodha i heard that it is 10 crore or is there no limit to it
I have seen 1 crore as the limit however I still want a confirmation on what is the maximum turnover Zerodha allows for a margin transaction
Yes, 1crore per transaction.
sir ,suppose a limit order is placed 0f buy 0n 26.60 rs and at that time it is trading on 26.10 rs ,can we modify the price and bring it to 26.10 rs and whether position is same in case of sell also?
Nishant if you place a limit order to buy at a price higher than the market price, it will get bought at market price immediately. So in your case if the stock is at 26.1 and you place a buy at 26.6, it will get bought immediately at 26.1 and once executed you cannot modify the order.
sir ,is day trading profitable sir ?
It is, but like any industry of skill (music, sports, arts etc), only a few people end up being successful.
Hi Nithin,
I am both Zerodha and ICICI Direct user. ICICI Direct provides a intraday feature called OptionPlus only for Nifty ATM Options. In this, you can buy or sell ATM options with margin requirement of 40%.e.g. if i sell 7500 call 100 options at 100 rupees, I will need Rs 4000, same for buying it. One has to mention SL while entering the order which is a market order, and on that SL basis limit price is calculated which is generally 20% below/above the SL mentioned.
Considering that one usually keeps SL at 20% in options, and another 20% for limits calculated by broker, its very safe to provide trading margin with 40% of capital for intraday option trading for ATM options( strike points within 200 point range of current Nifty Spot Price). I understand that for OTM options this can be risky for broker as values can increase/decrease suddenly but for ATM options 40% is very reasonable margin requirement.
Request you to consider this at this is very useful feature to use intraday and I don’t want to pay heavy brokerages to ICICI!!
We have similar order types, Check out Bracket orders and Cover orders, we provide higher leverage if you use this. But we don’t provide intraday leverage for buying options, think it is just too much of a risk.
Nithin sir ,thanks for your answer sir.Sir please tell me if i buy stock in intraday trading and price of the stock falls so much that i cannot sell it without making loss sir and as it has to be square off before 3:20 pm ,sir can i convert that sell order into CNC and hold it for unlimited time .
Yes you can convert MIS to CNC before 3.20 pm, but you need to have full money with you to do this. So if with 10,000 you have bought for 25000, you can only convert 10,000 worth of stocks to CNC.
sir ,full money means if i have 50000 rs in my trading account and margin limit is upto 5 times and i bought a single stocks of NHPC for 250000 rs and before square off at 3:20 pm {automatically} i have full stocks of NHPC which i have bought earlier for 250000 rs at lower price and cannot sell due to low price ,i can convert that full stock from MIS product into CNC
No, you can only convert 50000 worth of stocks to CNC
sir ,thanks for your reply . sir ,is equity intraday trading is more profitable or commodity trading and whether doing commodity trading is difficult.
Nishant, do ask generic market questions on Trading Q&A, check this question out.
sir,as we know that in MIS we can first sell the share and can buy the share even after selling,sir suppose if i first sell the share at high price and want to buy the share at low price in MIS product and share does not reach at that specific prize on which i want to buy , can i convert that into CNC product {though i have first sell the share and want to buy later}
You can convert if you only have the shares that you sold first in your demat account. Because whatever is sold and if you keep the position overnight has to be delivered to the exchange.
Hi, can i buy debt securities and mark a pledge on them for meeting margin requirements (after applicable hair-cut) for carry forward option sale positions
Presently you can trade on debt instruments, but can’t place them as a pledge because of liquidity issues. What you can do is use Liquid BEes for this, you can check the product note on liquid bees for this.
Thanks for the quick reply Nithin. Problem with Liquid bees as margin is that i effectively end up taking a long position on the market – i would ideally like to avoid such risk. How about a reasonably actively traded debt security like Nhai bonds?
sir , thanks for your reply , sir one thing more on CNC , if we first sell and want to buy later , whether there is any time limit to buy the shares or we can buy it at any time?
If you are trying to sell as CNC, you need to have shares already in your demat account. If you have it and sell it, you can buy back anytime before 3.30pm
I would like to know more about the share market , what is equities and F&O, Commodities,Cash so how can i learn everything as a beginner please suggest me
email to
[email protected]
Thanks
Kiran
Can i initiate a Nifty options short position with 100% SPAN Margin, but lower exposure margin – say, 25-50%.
No Amit, you will require the margin as required(SPAN +Expo) to initiate the trade, but we will let you hold the position until the margin doesn’t go below SPAN.
the response to a query dated May 13, 2014 by Sukesh seemed to suggest that it is possible to take a short position even with just SPAN margin…just wanted to re-check if i understood that correctly. Do understand that margin of safety would be lower and position exposed to square off if SPAN margin is disturbed.
sir , whether zerodda trading platform can run on apple Mackbook air ?sir if we first sell in MIS product and want to buy later and cannot buy, can we convert the selling stocks into CNC and hold them and will buy the same quntatity stock later at lower price?
No Nishant, presently it doesn’t work on MAC.
Nishant, like I mentioned earlier, you can’t hold a sell/short position in equity for overnight (if you want to, you will have to use futures). To convert from MIS to CNC on a short trade, you will need to have the stocks in your demat and if you don’t, you can’t convert.
Assume you shorted 10 shares of Reliance in MIS at 1000 and stock price went to 1010 making you a Rs 100 loss. To convert this to CNC, you need to have the 10 shares with you in your demat, otherwise you can’t. If you sell a share and hold it overnight, you will have to give delivery of the share to the person who bought it from you, so if you don’t have the shares in your demat, you will not be able to give delivery and hence not allowed
Hi What is the cutoff time to square off position in MCX on expiry day. For eg.., if I hold a June contract expiring on 30.06.14 by what time I should be squaring off this position?
Senthil, check this link.
Is there any possibilities of linking MT4 as Zerodha’s platform?
MT4 doesn’t have exchange trading capability, so not possible.
HI,New to zerodha some clarification needed bought one lot of DLF future on 02/07/2014
in Normal mode and carried it next day,as market was not favourable sold DLF on 03/07/2014 under MIS mode…now what has happened here is system has again bought DLF lot at 3.20 pm…
means my DLF position from previous day is open and to exit this position what should i do?
Rajas, whatever is bought or sold as MIS gets squared off as an intraday trade. So you will be still holding 1 lot of DLF in your account. You can exit that only tomorrow, but from next time if you have bought as NRML, make sure to sell as NRML itself.
sir,what is the concept of buying in cash market and selling in futures and how it works and after buying in cash market and selling in futures ,wheher our transaction is completed and we need to do smething else? and same thing in first selling in futures and then buy in cash market? sir ,it is a humble request to introduce your software on apple products because i have spend money to buy another laptop to deal with your company sir,
Nishant, what you are talking about is also called Cash Future arbitrage. If the difference between the stock price and futures price is different from the theoretical price, then this strategy can be employed. So if Reliance is trading at 1000 in cash and future trading at 1020, you can buy 250 shares of Reliance and Short 1 lot of Futures. On the expiry day both cash and future will be trading at same time, at that time the idea is to reverse this trade and earn Rs 20 as profit. Check this post.
Nithin sir, what is margin in stock futures in NRML and in MIS . suppose i bought lots of a share worth 1000000 rs , how much i have to paid in NRML and how much in MIS?
Nishant the list is here: https://zerodha.com/margin-calculator/Futures/
hi, sir new to zerodha .,want to arbitrage in futures by buying in one expiry date and selling in another expiry date? will it be possible on intraday basis?{ example buy one lot in july expiry date and sell in september expiry and whether MIS product can be used or NRML product will be needed?
If you are buying/selling in different contracts, you can trade either using NRML or MIS, no issues at all.
sir , there are three expiry months and month of july is in process , is it possble to buy in the month of july , the stock of august expiry date and sell it on the same date on intraday basis? ILLUSTRATION { suppose today is 13 july and on this date i bought HDIL share of august expiry and sell on the same day and took profit } sir why there is so much difference in price of same share in july expiry and in august and september expiry , sometimes there is even a difference of 6 to 7 rupees? how can arbitrage be done on the same share in three different expiry {sell the september series and buy july series of same share?
Nishant, I guess you are just getting started and suggest you to read something on futures pricing. Check this out: http://tradingqna.com/2652/futures-there-different-rates-different-expiry-dates-future?show=2652#q2652
sir, the fact is that i does not understand the link , please request to you to answer my query in simple language and not from links, i hope i am not disturbing you by asking questions again and again?
Nishant, your question is quite broad and I will have to explain you from the basics of pricing on futures. Check this, you have a link to take a course in intermediate modules called Derivative markets dealer module, read this module up and you will have a better understanding of how futures pricing works. But what I can tell you is that calendar spreads (buying one month futures and selling another month futures), might seem like an opportunity, but what you need to understand is that if something seems too easy to earn, the opportunity probably never existed.
This said, we at Zerodha are starting a new online education initiative to help people get started and learn from the basics.
will that be ok if i first sell the scrip in futures and instead of buying i square off the position so that my order of buy automatically get filled at the price going on in exchange on buy side ? and as i know that market type order get executed immediately on exchange at the best possible price { will it be possible that a sell market type order, when the scrip is trading at 1234 will get sell at 1230 or even more less }
as per the span margin calculater, i need 48000 rs margin for my positions( for buying and selling some options). i traded it intraday basis by using the basket order, so the required margin is 48000 X 40 %=19200
as per the span calculator. but in the trading platform rejected my order and asking a 30000 margin. what is the reason?
Dins, SPAN calculator shows you the margin requirement after taking all the positions. So, if one of your positions is giving you a margin benefit, you get this only after taking the positions. Don’t use the basket order, and place each one after the other, and it will work. The other thing is, if you want to execute using basket, ensure that there is extra margin to take care of individual orders, once all positions are taken, the margin blocked will be as on the SPAN calculator.
hi sir,
If i am buying 125 SBIN equities and selling 125 SBIN futures, what is the required margin?
For buying SBIN equity you will need 100% money and for shorting futures you will need the futures margin for 1 lot. You don’t really get a margin benefit on this.
thank you sir
HI, these tools – margin calculator / span calculator should be easily locatable from your home page. (am sorry, if i missed to locate it 🙂 ) currently we need to search (either in google / in your search box) in order to land to the necessary link, which will pose a problem for the users
Hey Ravi, we are adding so many tools that we have decided to dedicate a page completely for that, our technology page http://zerodha.com/technology.
Hi Nithin, Thanks and yes i saw that.. However https: // zerodha.com/ margin-calculator/ Equity/ link is missing there (Margin Calculator link). Currently i could only access it by coming to this blog and then clicking on the link that is provided in the blog. It will be good if you have this shortcut also in the technology page (along with other calculators you have there like SPAN, Brokerage Calc etc)
Let me know if i missed anything
ahh.. got your point, equity is part(separate tab) of the margin/SPAN calculator,
hi nitin, suppose nifty futures is trading at 7700 and i buy a call option that nifty will rise before expiry date and premimum at that time is 80 rs , first what actuaal amount i have to pay to buy 1 lot of nifty , and suppose nifty does not rise before the expiry then what are my losses if nifty falls to 7600 , any estimate how much premimum will fall if nifty goes to 7600 , if the premimum is 80 at 7700
Rs 80 x 50 = Rs 4000 is amount required to buy 1 lot, if nifty falls anything lesser than 7700, your option premium will become 0 on expiry, you will loose the entire 80 Rs
If nifty futures is at 7700 , and i buy call option that nifty will remain above 7500 , is it possible ?and then what if nifty close at 7600 but above my target of 7500 , but the question in my mind is that when nifty is at 7700 , then if i paid a premimum of 100 rs to buy call option at 7500 , but if nifty close at 7600 ( above my target) premimum falls to 90 , whether i still remain in loss , even if nifty close above my target?
Nishant when Nifty is at 7700 and you buy a 7500 call it will be trading at a minimum of Rs 200 (if it is early in the month as much as 300). So if you buy it at say 250 and if Nifty closes at 7600, the 250 will be come 100 and you will end up losing 150 points. You need to start from complete basics Nishant, try to search for some online course on F&O, You can also take the NSE derivative market courses, check this.
Hi nithin,
Suppose I am buying 1 lot of nifty of October expiry.And say the amount is 30K.And I have 31K in my a/c.So my question is that whwn my MTM exceeds -1K will it be squared off automatically or is there any idea of MTM=80% total vavailable cost (if so what will be considered as available cost 31K or 1K?)
Sayan, exchange puts a penalty in case the margin in your account drops below the SPAN margin requirement. For Nifty the SPAN requirement is around 19k, so we usually will square your positions off when it is around 15% above this level (so at around 22k for Nifty). You can see SPAN margin requirements by clicking on the PDF link Equity SPAN margin (PDF) on the right top of the table.
can we do penny stocks in intraday (mis or co)
Viki, if any stock is in T2T category (like penny stocks), you are not allowed to trade intraday on them as per exchange compliance requirement. So no, you cannot use MIS or CO.
Great post Nithin. Thanks.
In cover order calculator under cds future segment it show (Margin required Rs 0) when i choose eg:- EURINR DEC 2014. what is mean by that…
Hi,
Wanted to know whether the margin created by pledged shares can be used for delivery of Future & options or not. So suppose one has pledged shares worth 1,00,000 and after haircut the margin amount available is 80,000. If then one writes an option with margin requirement of 60,000, Can that position be carried without adding cash margin or Will it be squared off at 3.20 p.m if no additional margin is given?
Yes can be used for both intraday and overnight positions in F&O.
Thanks for these detailed explanations on margin policies.
I have few simple queries
1. For Intraday Equity trading, the Equity calculator page gives only around 239 stocks in that list. (Leverage of 3 to 10 times). I am sure that so many stocks could’nt be offered leverage. So the stocks which are not in the list, can I consider as 1x leverage. I mean I will buy stocks which are not in the list as MIS product type, provided I have sufficient margin in my account to cover for the entire cost of shares. (as if like CNC, CNC brokerage and charges are higher, so if I am sure I will sell those shares within the day, I can go with MIS fetching low brokerages)
2. These margins 3x, 6x , 9x etc are zerodha specific margins or it is common between all brokers (as if stipulated by NSE)
NSE provides Equity Calculator, with VaR margin etc., and says margin requirement varies everyday based on volatility. So Is zerodha margin calculation also varies in real time/every day or it is frequently changed at regular intervals. If so what is the interval. When is the last time the 239 scrips updated for the margin it is showing currently.
3. For example, if NSE gives margin around 5x and in zerodha margin page it shows only 3x (Is there a chance for this, I dont know, since NSE margin requirement varies every day), will my order gets executed even if I place 5 times the margin I have in my trading account. Will zerodha platform by itself will check for margins before placing the orders to NSE? Or the orders get placed and NSE rejects the order if it fails to meet the NSE margin requirement? In later case 5x may get executed.
1. Yep
2. Zerodha Specific, every brokerage will have a different policy based on their risk tolerance. This has nothing to do with NSE VAR, we have our own internal formula to calculate it. Changes only at the end of the day, usually a change only if there is tremendous volatility in a stock.
3. As I said, there is nothing called NSE gives margin. When you buy or sell stocks, NSE will ask for the entire money or entire shares respectively. Because you commit to trade intraday by using our product type as MIS, the brokerage gives you the additional leverage.
Understood. Thanks. Very clear explanation.
So for stocks which I have bought under 9x for example, (margin amount blocked say 5000, and I dont have any margin left say my margin left is only 50 rs after blockage, If I make a loss in that MIS stock of more than 5000 or 5050 (which one I dont know), will the stock be automatically squared off by zerodha? Is some team monitoring for this square off or it is done automatically by the system.
I know the leverages are calculated based on volatility and there is really a very rare chance I make a loss of more than the margin which got blocked. Still wanted to know what would happen in such case.
Square offs will happen when you lose 70% to 80% of your capital, so with Rs 5000 you lose 3500, the position will get squared off. Our Risk management team monitors this.
That clears it. Thanks
I want to do calendar spread in futures in nifty , difference between august and september nifty is 50 and i bought 10 lots of nifty (500 ) and i expect the price to reduce , suppose price reduced to 48 , my position will get automatically clear on falling of price or i have to do something else?
Hi Nithin,
Your system blocks margin first on pay-in, then on pledge. Due to this, pay-in money is blocked and not available for withdrawal even when margin on pledge is available. My customer ID is: RM0079
Highlighted this twice to your support staff, but the response is the same. My experience is that your support staff is only trained to provide standard answers (copy-paste), and not to look at exceptions or to forward exceptional queries to knowledgeable people.
Let me have this checked, we have just reworked on our collateral margins, so ideally should not happen.
Hi,
On the ledger, the margins that get blocked is on the cash balance. However when we are processing payouts, we will block only 10% of your total margin blocked in cash while the other 90% is blocked out of collateral margins provided you have sufficient collateral margins. After blocking 10% from cash balance, if there is any extra cash in your account, you can withdraw the same.
Assume:
Cash Balance: 32,000
Collateral: 3,45,000
Margin blocked for position taken: 1,23,000
If you view your ledger, you will see a negative balance of 91000. However while processing payouts, we will only block 10% from cash. In this example we will block 12300 (10% of 1,23,000) from your cash balance leaving you with a withdrawal balance of Rs.19700 (32000-12300)
Venu ji,
Firstly, there was no need to write my name in your response, when I have not mentioned it in my comments. Client confidentiality should not be taken lightly.
Secondly, nothing irritates a client more than highlighting the same thing multiple times and receiving standard responses even after highlighting to the CEO. If you had gone through my specific case, you would have known that: (1) I have pledged Liquid Bees where the 10% blocking does not exist
(2) the screenshot I sent to [email protected] clearly showed that the withdrawal amount is more than the account balance, but while withdrawing the amount, there was an error saying that “Insufficient Equity balance!”. The withdrawal amount shown was correctly shown, but the system did not allow me to withdraw even 2/3 rd of the amount shown there, which meant there was a system problem
(3) as of yesterday night too, the situation in (2) remains, ie, the withdrawal amount is more than the account balance, but while withdrawing the amount shown in withdrawal amount, there was an error saying that “Insufficient Equity balance!”.
(4) if you take my account detail and manually calculate, you will have the same conclusion.
Hi,
Did have a look at the screenshot. However we aren’t able to replicate the scenario. Ideally you should not have faced any issue whilst placing the withdrawal request. While we checked in the test servers, the withdrawal request was going through.
In case you face this issue again, please shoot an email to [email protected] and I’ll have this checked immediately & will fix it once and for all in case there are any issues.
where i can see the current market price for buying cover order
As in? you can see the market price on the marketwatch.
Hi Nithin,
One more question –
If i want to enter a F&O position which say requires a margin of 10k (SPAN – 8k, Exposure – 2k) but i have around 9k in my account.
Now i take the same position Intraday so the margin blocked is about 40% of Overnight position i.e. around 4K.
Before the market closes i plan to take this position overnight, now the cash in my account (9k) is more than the required compulsory SPAN margin of 8k but less than the required overall margin of 10k.
Will i be allowed to convert my intraday position to overnight, with total cash of 9k in my account?
Thanks in advance.
Regards
Sukesh, you will need the entire 10k
Thanks for the reply, so if my understanding is correct –
I have to pay up entire margin amount (SPAN + Exposure) when I enter the position.
However once I enter the position, in case the position goes against me, I would be allowed to keep the position till I touch the SPAN requirement levels which is around 80% of the total margin requirement.
If the position makes further losses (does not maintain SPAN requirement) then chances are your risk management team will square off my position?
Yep
I read in one other blog that if we dont maintain the required total margin then NSE will charge a penalty at 1% of the amount by which i am falling short from required margin.
Can you please throw some light on this? How does it work? Is it 1% per day?
As per NSE rules if the margin in your account is below the SPAN margin requirement, there is a penalty of 1% per day.
Thanks, so this penalty is not applicable if my margin is above SPAN but below total margin rite?
Thanks
Yep.
i am newly registered clinet. i am asked to payin 5000 to 6000.can i use that 5000 to 6000 initial deposit for trading fully? what are restriction? please expalin
You can use the 5000 to 6000 to trade completely. No restrictions.
hi,
i wish to know how can i sell stocks before they come to my DEMAT account. Is it possible ? And what happens to the funds ,do they reflect in my trading account as soon as i sell stocks . for eg i buy 100 shares of reliance on CNC order(Delivery) , now can i sell them on the same day or next ,before they hit my DEMAT account. if yes, then can i trade on the same day again with the money from the proceeds of selling those shares.
thanks
Yes, you can buy and sell using CNC during a day, it will be considered as an intraday trade, yes the funds will be available immediately along with the profits you made or minus the losses you made on the trade. Yes you can buy CNC and sell next day, this is called BTST/ATST. Check this post
Hello Nitin, I have a query regarding margin provided. My friend opened a trading account with a broking house, where only 6500 margin is required to sell an out of the money NIFTY call. Is ZERODHA also thinking of reducing margin requirements?
This margin you are talking about must be for intraday, because for overnight position, exchange has set a minimum otherwise which a penalty is levied, immaterial of which broker you trade with.
Check our SPAN calculator, to short a 8500 call overnight margin requirement is around 24k, so intraday is around 10k. If you use cover order/bracket orders, you can trade the same for around 7500.
Yes you are absolutely right. I was misinformed.
However, I went through the details and observed that there is a difference between zerodha and other brokerage in following scenario:
Current Nifty 8100 –
Sell 8600 Calls + Sell 7600 Puts
Zerodha charges – 48,906 Rs total.
However the other brokerage charges ~ 20000 Rs. Note that this is not intraday margin.
Is it that they are charging only one way considering that there could be risk at one side only?
Kailas, margin required for holding positions overnight is as stipulated by the exchange and there is be a penalty in case it is blocked lesser than what exchange says. My guess is that you are comparing with what the other broker is charging you for intraday with ours which is for overnight.
Just want to ask why the margin for cover order for Futures has been increased recently,it has been doubled for each lot, I really love Zerodha for initiatives like crowd.in etc but with this change iam really disappointed..iam a high frequency trader,for me margin and lot size is everything.. i trader with lot of brokerages like angel,infoline but i find Zerodha is the best..but with this change iam really disappointed
Yogesh, which stock are you trading on? We increase margins usually if a particular stock becomes extremely volatile.
Most of the stocks like india cement,oriental bank of comm,justdial,crompton,jubfood…they used to show for 1 lot as 9000 or justdial it was 4000…now they are showing as 24000,31000 it is almost 2-3 times you have increased..it was done couple of days back..Please look into matter as it hampering my trading plan.may i know the reason why do you increase the margin when the stock becomes volatile or Could you introduce a product for High Frequency trader who trade intraday with less margin for F&O with a monthly plan of 1 lakh like that..it would be helpful.
Yogesh, you must have mistaken, just double checked margins have not been increased in the last 2 months.
Hi NItin ,
I Have a small query regarding margins
Suppose I wanna buy nifty future oct 1 lot I shld have margin of Rs. 31661
I wanna sell nifty future nov 1 lot I shld have margin of Rs. 31661
If I buy and sell both together i need to have margin of Rs.8109
So my questions are
1) If there is Rs. 15000 in My account can i take both the positions
2) Suppose next day nifty is up by 20 points at 10 a.m.and i bought nov futures and close the Position of nifty nov futures . and i waited till 11 a.m. by that time nifty was up bu 50 points and I sold my oct nifty position . Now during 10 a.m. to 11 a.m. I had only one position i.e. Oct. nifty and margin required for that is around 32,000. Once I clear One Of position from above do I immediately need to deposit the margin or how will It go? Can you please explain In detail.
1. No, you will need atleast 31k to enter the positions as the margin required to enter the first lot is 31k.
2. Yes, if you exit one of the positions in the spread contract, you will need enough margin to hold the other. If not, the positions could get squared off by our RMS team immediately.
Dear Nithin
I believe total margin is SPAN margin plus additional margin (RMS margin) – I believe the SPAN is calculated based on volatility and VaR and mandated by exchange; how is RMS margin calculated at Zerodha?
Also on related trades (e.g. selling a CE option covered by purchase of future contracts) SPAN calculator shows there is a margin benefit; does a similar margin benefit apply to RMS margin as well?
I’m talking about conditions where options/futures are held overnight (NRML trades; not MIS)
however one other question – is the RMS margin different for NRML and MIS trades?
SPAN and Exposure margin, the margin benefit is usually only on SPAN in case of hedged positions.
nitin
if i short a particular option with leverage,how many days can I keep the position.
Dear Nithin
let’s say I trade in options of two different companies A and B (e.g. TCS and INFY) in the following manner:
For the sake of simplicity let’s say both A and B today trade at Rs.500 each, lot size is 1000 shares.
At the beginning of the month:
I sell 10 ATM CE contracts of A for a premium of Rs. 20/option = receipt of Rs. 2Lacs in premium and margin blocked (total, SPAN + initial) is Rs. 10lacs
I buy (at the same time as above) 10 ATM CE contracts of B for a premium of Rs. 20/options = I pay net premium of Rs. 2lacs. Since I’m long CE options here, there is no margin; also there is no margin benefit.
Now let’s say I hold the two for the till the middle of the month (say 15th) and the prices of stock for A and B are Rs. 110 and 112 respectively.
Clearly the margin that I paid initially for shorting CE options in A is completely eroded because of the increase in prices BUT at the same time I have made a lot more money in options for B. Also volatility for B prices is more.
My question is:
Would I get a margin call in the above scenario if I haven’t liquidated any of the two positions on 15th, or would my unrealized gains in B cover the risks on my short options in A (to some extent at least, if not to the fullest extent)?
Vinayak,
Yes, you will get a margin call because you won’t be having any funds to hold your short call position. Your profits from B is just notional and hence won’t be good to cover margin requirements for A. Also, exchange will charge a short margin penalty if you hold position without the minimum SPAN margin in your account.
Kindly explain the loss for the following Intraday Trade as I am a beginner in this field.
1.Scrip – Tata Steel – NSE –
Buy Amount with Margin (as per your Intraday Margin Calulator 9x) – 120 nos – 54876.00, Sell Amount – 54660.00
Hello Nithin,
As the market is going up after elections i see that the margin requirements are also going up for trading futures & options.
In many cases the margin requirement is illogical and ridiculously high.
Few days back you had invited for feedback from trading community which you will pass on to the stock exchanges – can we give this as a feedback to reduce the margin requirement to logical levels? Is there any relief we can expect in near future from margin requirement perspective (specially on Nifty f&o)?
Thanks a ton
Yep, we have already sent this to the exchanges. As you are probably aware, the lot size of Nifty is reducing to 25 by October 31st.
Thanks!! I hope NSE will do something soon to reduce these ridiculously high margin requirements.
I was not aware of the change in lot size of Nifty.
What will happen to Nov & Dec contracts which are in lot size of 50? Will that be split as 2 lots automatically?
Also reducing the lot size will only reduce the entry barrier but the cost of trade will still remain high due to high margins rite?
Check the circular here: https://zerodha.com/marketintel/Circulars/ , yes 1 lot will be split into 2 automatically for Nov and Dec contracts. Margins will also automatically drop per lot, as in you will be able to trade 1 lot with around 15k in your account.
hi nitin, is it right that lot size of nifty is decreasing to 25 per lot and if yes , then why ? and my another query is that what is the margin requirment for option writing of one lot of nifty { if lot is of 50 shares then what and if lot is of 25 shares then what} and is the margin same for call writing and put writing
Yes Nishant, from October 31st onwards. Check the circular here.
I guess the reason for doing this is to improve liquidity, as the margin requirement per lot had gone up quite a bit with Nifty going from 5000 odd levels to 8000. Margin requirement will basically drop by half, so if you could trade 1 lot with 30k, you will need 15k to trade 1 lot from now.
From where i’ll get the “Price” for buying Nifty Futures 27-11-14 for for calculating margin in BO & CO?
You can find it on this link.
hi nitin, suppose i write deep out of money call or put option at premium of 10 and on expiry premium comes to 0 or 0.05 which i will not be anle to buy , nithin then what will happen to my capital on expiry?
Nishant, all out of the money options on expiry day will be worthless, so at the end of the day even if you don’t buy back, the margin blocked for your short option position is released.
thanks nitin sir for answering my query, one more thing as you told that my money will come back on expiry in deep out of money option if premium comes at 0 , but will it come with profit or not and my another query is that if i need cash earlier can i square off my position earlier and will it get squared off at the going buy price premium
Nishant, check this post on option writing, you will get all your answers.
Dear Nithin
I buy and sell overnight stock futures and options.
In the daily margin report there is a section “Margin required byExchange/NSCCL” that has three columns “Initial Margin” “Exposure Margin” and “Total Margin” . In all my reports it doesn’t show any Exposure Margin, the column is blank.
Then there is a section “Additional Margin required by member as per RMS” This shows some margin as well.
If I use the SPAN calculator, that show SPAN margin and Exposure margin which are broadly in line with “Initial Margin” and “Additional MArgin requires by member as per RMS”
Is the above the intention of the Daily Margin Statement?
Second question?
Assuming the above is correct, you had replied to Sukesh on 06 Sep above that automatic square off will happen once available margin falls below the SPAN margin. Does it mean that while when the “Additinal Margin….” may not be fully available in client account, as long as SPAN margin is available Zaerodha will not square off the positions (but client may be advised to square off on his own)?
Third question:
Does you SPAN calculator https://zerodha.com/margin-calculator/SPAN/ work exactly as the exchange calculator? I just entered my position (I had traded three days ago) into the calculator and the margins are larger than in my daily statement (the exposure margin is slightly larger, about 3-5%, that the “additional Margin …” column in my statement; the SPAN margin is a lot larger, about 15%) . If the SPAN calculator is not exactly what you internally use that is OK, it is a pretty good estimator (and slightly higher margin requirement estimate can’t hurt), but knowing that would help.
Also Is there a difference between margin requirements if a position was acquired a few days ago (and has consequently made MToM profit/loss) vs you are trying to enter that position now?
1. additional and exposure margin mean the same.
2. Yes, if the margin drops below SPAN is only when we square off for your NRML positions. And that too this is typically done only by end of the day (between 3pm to 3.30pm).
3. SPAN calculator is not live and can’t match exchange margin requirements to the tee. There can be upto 10% difference at times, but yes most of the times it is within a 1% range. Typically when big market movements happen, like yesterday, exchange margin requirements go up during the day. This is not captured by the SPAN.
I tried keying in the contracts again. The Exposure margin matches exactly. SPAN still is off by 0.3% (it is more on calculator than in the statement)
The difference can’t be because it isn’t live because market was close today so the calculation must have been done with end-of-day data from yesterday.
Anyway 0.3% difference in SPAN is hardly anything.
Just saw a very interesting thing – The Exposure market in SPAN calculator matches (exactly; within 25 paise; the difference is due to rounding error) the Exposure market in the Daily Margin Statement that came on Nov 31.
The SPAN margin matches the SPAN margin (exactly; the difference is Rs. 0) in the Daily Margin Statement that came on Nov 30 !
Looks like your SPAN calculator is using more up to date data for Exposure Margin 🙂
One more question on square off.
In the hypothetical case that, after a volatile day, my account doesn’t have enough to cover Exposure margin fully but SPAN margin is fully covered, does the exchange levy any interest/penalty in such a case?
No, penalty only if it is lesser than SPAN, penalty of 1% per day of short amount below the SPAN margin.
hi nitin, my elder brother is on wall street , he told me that if you want to buy option buy it for a long time i.e. for one year , want to know that can i buy options for such a long time in india
Yes, there are long dated options available for Nifty. Click here to see the option chain, you can use the drop down on expiry date to choose the expiry.
Hi Nithin,
Are the margin requirements that are prescribed by exchanges same for everybody including retail investors, Brokers, FII etc?
Please let me know if i can do something like register as a sub broker or something so that my margin requirement for shorting options can go down?
Thanks
Sukesh
Margin requirements are same for everyone.
One thing i am observing is that as the markets are going high so are the margin requirements.
As per my logic the margin requirements is (somehow) proportional to the option premiums. So i was thinking that option premiums will go high as the margin requirement goes higher but this doesn’t seem to be happening. Is there some reason for this or am i missing something?
Thanks
Option margin requirements go up with the volatility in the markets.
Hi Nithin,
Thanks for a super quick response.
The reason i said that the option premium goes up as the value of the underlying market goes up is because i made a simple calculation using the Black Scholes option calculator.
Keeping everything constant (i.e, Interest Rate, Volatility, Time for Expiration & Dividend yield), i found that just by increasing the price of the underlying, the premium of ‘At the Money’ option increases considerably.
I have attached the screen shot from options calculator for reference.
Thanks
Of course Sukesh, if you have bought 8500 calls and market goes up, the value of 8500 call will definitely go up. That is because ATM options would have now become ITM and that would mean that for every point movement of the underlying the option premium also goes up by the same.
hi nitin , if there is no volume on 9800 call option { whaether it if for one month expiry or it will be long} , shall i be able to buy it or in other words how to buy something or write something when there is no volume at all in that definite strike price?
Not possible to buy/sell if you don’t have a counter party to the trade. The best you can do is place a limit order and hope that it gets executed.
what is margin required for writing one lot of option of currency and how much of one lot of option of dollar contained and can you send me an example of option writing in dollar index
Firstly, no option for you to trade on dollar index. 1 lot of USDINR is 1000 USD. You can see the margin required to write options on our SPAN calcualtor.
nitin , i bought 9000 call option in nifty , my query is that even nifty is moving higher , but the premium in 9000 call is falling slowly ? whats the reason for that ? is the same thing happen in stocks also ?
Nishant, you have bought deep out of the money option, so Nifty has to move significantly from the current 8300 odd levels for you to see any uptick in the option price. Buying deep OTM options, are like buying a lottery, the chances of getting it right is very very slim. Btw, do post such questions on general market related queries on http://tradingqna.com/
hi nitin , i today write tata motor put of 490 strike price and stock is trading at 520 , want to know whether my put is deep out of money or not and why the traders are biased toward put writing instead of call writing ?
490 puts is around 5% away from the current market price of 520, so it is not really deep out of the money, but it is out of the money. Traders actually write more calls than puts.
hi nitin , the open interest data which gives clue about f&o market , how to check it and whether increase or decrease in open interst is check fro future data or from option data of that definite stock and how to see where there is call writing and where is put writing and there is increase or decrease in open interest in different strike prices , sir how to judge it
If you have questions on general markets, ask on tradingqna. Check this for your answer: http://tradingqna.com/389/relation-between-open-interest-volume-for-futures-trading
thanks nitin,its really help me , i understand all the thing but a question is still in my mind that whether to watch open interest from future stock alone ( like idfc stock , to watch its open interest whether to see its future stock price or its option stock price of the strike price going at futures ) and if have to watch live the open interest data where have to see?
Nishant, why don’t you ask the same question on the tradingqna link. This blogpost on margin policy has nothing to do with the question. By asking in the right places, will help anyone else in the future having the same question. 🙂
is there any extra leverage provided for intraday option buying?
i know its 40% for intraday option writing(and even less if that option is OTM)
i think margin available for option buying too for eg: icicidirect offers “optionplus”(https://secure.icicidirect.com/trading/FNO/FAQ-Futures.htm#optionsplus)
Yep, we provide if you use bracket or cover orders.
How do I avail additional margin for F & O Market margins pledging my shares in my dmat a/c?
Regards.
Send a request to [email protected] asking to pledge your shares. By next day you will have that margin in your trading account.
hi nitin, i want to know why derivative trading is not popular on BSE and can i do deivative trading on BSE?
Yes you can trade on BSE derivatives with us, the exchange(derivatives bit on BSE) is relatively new and probably will take a while before retail participation picks up significantly.
hi nitin , today i write 1000 shares of nifty of 8700 call option and nifty is trading at 8410 , if at expiry nifty closes at 8600 , but premium of 8700 call increases , then will i incure loses or i will be in profit because nifty closes below the level of my writing point of 8700
You’ll definitely be in profit if the market closes below the strike price of the call option you’ve written. At expiry, all out of the money option prices go to zero so option writers make profits.
is there any way by which open interest data of F&O market can be watched live?
Yeah, you can view the Open Interest data on Zerodha Trader.
You can go to Market > Top N (Ctrl+Shift+T) and choose the option “Open Interest” and view the details.
sir, i want to know that what is difference between contract traded and open interest , because today when i writing 250 put of SBIN { and stock is traded at 295} , contract traded are very low { around 110} but open interest is in lakhs and i also want to know that though it is the month of nov but can in trade in stock options of dec contract in last ten days of nov contract and whether volumes are enough there to trade in last ten days of current expiry
Contracts traded (volume) is something that is happening on that particular day. Open interest refers to the number of contracts that are active for that particular scrip. Total Open Interest refers to the total number of active contracts for that entire derivative chain. So even if very few contracts were traded today, it’s possible that a lot more were traded before. Also, since the stock split happened for SBIN everybody’s contracts just increased 10 fold. 🙂
The volume on the next month contracts are always gonna be much lesser than the near month contract until the near month contract has expired. You can enter positions, but you can’t expect a high amount of liquidity.
thanks sir for your useful information , but if contract traded for a particular trade is low ,but open interest as i say is in lakhs , so then there is no difficulty in either buying or writing that particular srip , even if contract traded is very low? and another thing i want to know is whether STT applied in writing options on premium ?
Open interest isn’t really liquidity, there could be large OI but people not trading the contract actively. Yes STT is on premium – 0.017% on selling side.
thanks sir for your information , but i want to know that suppose there is last date of expiry and nifty is trading at 8400 and CE of 8600 is at 15 rs premium and i write 8600 CE on the last expiry date at 15 rs premium and somehow nifty reaches 8500 but way below the level of 8600 but the premium of 8600 CE increases to 20 rs , and i am incurring the loss of 5 rs premium , but i want to know that will i incure loss or will i make profit due to nifty closing below the strike price of 8600 and if i make profit , what will be the profit if i write 4 lot of nifty .{ will the same thing applies to stock option also}.
🙂 Nishant we will very soon have a module on F&O on Varsity and will help you with your option basics. If you write 8600 CE and Nifty closes at 8600 or anything below that, the entire premium that you would have received would be your profit. So if you have shorted at Rs 15, 4 lots or 100, that would mean profit of Rs 1500 as profit.
i have already a account in zerodha , want to open another account for my brother who is living in USA , can i open it on my mother name and can i connect my bank saving account which is already connected with my account with the new account and please send me the link of account opening form and you guys are really great , hats off to you for operating this blog
Account can be opened in your mothers name, but you can’t map your bank account to it. It has to be her bank account.
Hi,
I have a query, if I buy some ‘X’ share at Rs.100 in CNC with an amount of Rs.100000 of 1000 quantity for CNC and 10000 quantity for intraday, same day if I achieve my target and booked profit it will be converted to intraday as per my understanding so will you increase my quantity to 10000 though I have bought on CNC?
Didn’t get your question correctly. If you have 1000 shares as CNC, it will remain like that and the shares will be credited to your demat account. If you have bought another 10000 quantity as MIS(intraday) it will get squared off at 3.20pm automatically. If in this 10,000 you want to convert 1000 to CNC, you need to do it before 3.20pm.
Hello,
I am new to futures, trying to understand few things.
Please excuse me if i dont make any sense.. so here is the question.
Say i am doing intra day on nifty :
I sell nifty future at say 8000 which has lot size of 25, so how much money should my account have .
8000 * 25
The calculator here @ https://zerodha.com/margin-calculator/Futures/ shows less, so how the amount is calculated which i should have for intraday.
Now while squaring off for the day , i buy back nifty futures at 7990 with a profit of 10 points,
now how will be profit calculated, will it be 10 * 25 or the margin difference.
I hope my question is clear.
Regards
Akshay
Yes Akshay, keep looking up Varsity our education initiative, we will very soon have the module on F&O on that.
Futures are leveraged products, so to buy 8000*25 = Rs 2lks worth of Nifty, you will need only a small portion of it also called margin. Margin for trading Nifty is around 9% of the contract value, so in this case it should be around Rs 17000 to Rs 18000. (what you see on the margin calculator link).
IF you shorted at 8000 and bought back at 7990, your profit will be Rs 250 ( 10* 25).
Thanks for the prompt reply nitin.
So it is as good as margin leverage provided by you guys on equity intraday but here the leverage is straight from exchange.
If.. in a not so happy day 😀 , i am shorting and nifty future goes up 9% its as good as 100% loss and product will be auto squared off.
Also the brokerage/stt/ and other taxes calculation will be at 2L.
Regards
Akshay
sir , what are weekly options on BSE and whether trading can be done on the last date of expiry on weekly options and on monthly options
Vicky if you have questions which is not related to a particular blog post, do ask that here: http://tradingqna.com/
margin required to write one lot of option sensex and bankex on BSE?any other indexes on BSE on which options are available
Presently only sensex options, margin required is similar to Nifty options.
nitin , on your zerodha page , i watched out STT trap link and completely understand it but when i watched a similar question on trading q&a , there a different answer appears and it is written that even if you write options and let it square off automatically on expiry date , even then you will attract an higher STT on whole of your contract value , what is that , i thought that if we write options we have already paid the STT on premium, then why it apply to whole contract , please clarify it ?
Vicky, let me look at that answer, if someone as answered like that on tradingqna he is wrong. If you have written options, STT is already paid.
whether trading at BSE futures and options is available at Zerodha
Yes Vicky. If you aren’t enabled, print this exchange/segment addition form and send it to us.
nithin, i am downloading the form from your site , but there is one section of trading account form and other is trading and demate account form , let me tell you i want to do option trading in futures and option on NSE and BSE and want to do it intraday and positional and please send me the correspondence address of zerodha where the form has to be send
Zerodha SPAN tool is not working…
Seems to be working, are you trying this? https://zerodha.com/margin-calculator/SPAN/
hi nitin, why you does not provide about bse future and option margin in span calculator
Vicky, still confusion on exact BSE margin requirements. Hopefully should be up soon.
nitin , today at 3.20 pm when i decide to write 17800 put of bank nifty going at 11 rs premium , i place the order at 11 rs , it does not get executed but at 3.23 pm, i reduce the price to 10 rs , it gets executed immediately , i just want to know why even the sell price is at 11 , my order does not get executed and when i reduce the price to 10 , it get executed , whether it is because of expiry or something else ? please reply me i put this question on trading q&a but does not get satisfactioraly reply , so i thought it will be good to ask you.
That is how markets are demand and supply. At Rs 11 there was no demand, at Rs 10 there was. It is not because of expiry, that is how markets are every day. I try to sell you apples at Rs 100/kg, you don’t want to buy it. If I reduce to Rs 80/kg you probably will buy it. Do be more specific when asking on tradingqna.
Hi NITIN, today i ask a question on trading q&a that whether options on NSE and BSE are American or European , it got a reply that in both exchanges options are European , but one day i write nifty option and i got profit on same day and then i buy it , then what was that , why i am able to buy it after writing the same if options are of European style , it creates a lot of confusion , please you must clear it and if possible please in detail.
Both American and European options, can be bought and sold or vice versa on the same day. The difference in American and European is that all European options can be exercised only on the last day of expiry. In Indian context where all options are cash settled, the difference is hardly any. We are putting up detailed discussion on this in http://zerodha.com/varsity
The only trade that I will be doing is shorting out of the money nifty options.
There will be no trades in future.
I have margin benefit through pledged shares.
Do I have to keep 10% cash?
Thanks,
Kailas
Nopes, no need to keep cash unless there are mtm losses.
hi nitin , just want to know whether the principle which applies in option writing on NSE that if in put writing nifty remains above over strike price and if in call writing nifty does not close above over strike price , writer will kept the whole premium irrespective of the fact that premium has increased ,will also apply on option writing in sensex index of BSE in weekly options and monthly options and also whether volumes on weekly options on indexes will available on only last day or are also present one day early before expiry?
Yes works like on NSE. Check this option chain for liquidity on BSE website. Liquidity on BSE options are usually available on a few contracts.
hi nithin,i am checking the put call ratio , there is 0.85 ratio on put side and 0.92 on call side , then how we know what is the final put call ratio , whether there will be average by combining these two ratios?
Didn’t get how you are getting 0.85 and 0.92 numbers. Put call ratio is , open interest of Puts divided by open interest of calls.
hi nitin , i know this a little bit personal question but i cannot stop myself from asking you , when you are a trader and when you write options , did you use any software for your help or general mood of market , put call ratio , world market view , indian market view are the factors which you take into account in writing options and what is your average profit percentage per month in the market ?
Have you seen this post?
Sir, If I Buy 100 Nifty Dec14 8600CA and short 100 Nifty Jan2015 8600CA, What will be the total margin requirement?
You can check this yourself using our SPAN calculator https://zerodha.com/margin-calculator/SPAN/
Hello Sir,
Does Zerodha provides intraday margin for Short strangle strategy intraday as provided by other brokers (i.e selling say 8200 put and 8300 call simultaneosly) and squaring the positions same day.
If yes, what is the no of times margin. Also plz let me know the amount required in account for executing the above strategy for 1000 quantity each side including the margin given by zerodha
Varun, you can use our SPAN calculator to have this checked. For intraday, we ask you for 40% of the overnight margin requirements (that is around 2.5 times leverage). If you use products like Cover order and Bracket order (which have compulsory SL) this reduces to 25% or 4 times leverage.
nitin , if open interest on put side is 3139025 and open interest on call side is 3609000, then what will be the put call ratio and whether it is bullish or bearish signal
PCR will be 313…/360… which is 0.86. PCR in itself doesn’t mean too much, you have to see how it is trending, generally lesser than 1 means more calls being written (which could mean bearishness) and over 1 meaning more puts being written (which could mean bullishness). Best to see how PCR changes with change in market, this might be more insightful.
Cheers,
hi nitin , today on bse , i am watching open interest data , sail trading at 78 approx, 65 put of 18 dec expiry weekly at 1.95,and 70 put of month end expiry at 0.10 , nithin why there is so much difference in price
Vicky best to put market related questions here: http://tradingqna.com/.
Dear Nithin
there seems to be a change in daily margin statement – earlier the Column titled ” Additional Margin required by member as per RMS ” used to have the exposure margin and the “Exposure Margin” column used to be empty.
For past several days it is the other way round; the Exposure margin is showing in its proper column.
Did anything change in Zerodha policies and/or regulations from SEBI/NSE
Also you had earlier written in this blog that in case of margin shortfall, Zerodha will not automatically square off positions as long as there is enough money to cover the SPAN margin (even if there isn’t enough to cover Exposure+SPAN) – is that still true?
Hi Vinayak,
a) This was done on the basis of NSE’s suggestion. As you mentioned, we are now showing the Exposure margin under the same column as against the “Additional marging levied by Exchange” column.
b) This would be at the discretion of the RMS team. In your own interest, its best to maintain both SPAN and Exposure margins for any carry forward positions.
Dear Venu
I’m not planning to keep outstanding margin, the question is to deal with conditions of high volatility when the available margin may dip a little below SPAN+exposure requirement (e.g. by about 20% of the exposure margin requirement; may be 5-7% of the overall requirement) for perhaps a day, may be two (near a weekend). At the time of entering the position I keep some extra money in the account; however if the market turns suddenly then I may not realize in time that margin has gone low before the market close. My positions are always cross-hedged (small in individual securities; overall hedged by both long-short in options) such that shortfall even with a 10% single day fall in any stock or broader index will not cause margin to go below SPAN.
My problem with “discretion of our team” is – they may not understand what is going on and may square off the wrong thing. Zerodha doesn’t give margin calls so there is no way I would be able to close a few positions on my own. And as last week has shown I may not even be able to logon to the system even if I had an idea that something is going wrong.
Hence the question about square off – Nithin had earlier on this blog (on Nov 1 and Nov 4) commented that positions will not be automatically closed as long as there is enough money to cover SPAN margin.
Here are two other questions:
(1) Earlier Nithin has written in this blog that the interest chargeable is on the amount by which margin is short over the SPAN-only. If there is enough money for SPAN but not enough for SPAN+exposure then NSE will not charge interest. Is that still true?
(2) whether there will be automatic square off of positions in case SPAN + 50% of the exposure margin is still covered by the cash available at 3:20PM (perhaps with some sort of an email warning to close the positions next day)?
This also leads to some feedback from me – on the new platforms and software you are planning perhaps it may be a good idea to generate some automatic alert emails if the margin is going in dangerous territory and/or too much volatility is suddenly coming in. Even if we do have funds, mobilizing them into your accounts may take a few hours and better to have some forewarning.
1. Yes the NSE penalty comes into place only when the margin is below the SPAN margin requirement, and not below SPAN+Exposure.However, for currency derivatives, you have to maintain both SPAN+Exposure or margin penalty will be applicable
2. We don’t typically square off positions if the minimum SPAN is present in your account. But that said, if markets are extremely volatile, we square off positions upto around SPAN+50% exposure. But if you have this much covered, we won’t run any square offs.
Yes, sending alerts on margin is something that we definitely intend to have in the things we have planned for future.
On the alerts – I noticed there is a “Set Alerts” option once I login online (email and SMS)
does that send SMS already?
No it doesn’t.
hi nithin , trying to add bse options on market watch, but not adding , any problem in zerodha?
Shouldn’t be a problem, but let me have it double checked.
hi nitin , have you checked why bse options are not getting addd on market watch , i ask question last day , you said i will check!
It should be working now.
can you tell me if there is open interest of any stock option and traded quantity is same as that of open interest , will it be possible to do trading on that particular option.
They are different things, check this link. You can ask all your market related queries on TradingQNA directly.
whether the margin required for BSE futures stocks is same as that of NSE futures where stock listed on NSEfutures are same listed on BSE futures?
Yep, it is almost the same.
just want to conform from you thats why i am asking here , on trading q&a , somebody has ask a question and answer to that question is contradictory from your answer earlier given , question is , due to low volumes on BSE deravatives , it gives incentive to traders to trade on options also which does not have any open interest and whether the traders which trade on it have to do intraday or can carry position till expiry ? the answer to that is it can be carried till expiry , but in one question you have answer that it has to be done intraday , so can you please just clarify SIR!
Answered: http://tradingqna.com/10297/deravatives-incentive-options-interest-position-intrady?show=10297#q10297
Hi,
In regards to collateral marging, when you say only applicable to F&O segment, does this include Currency Futures and Options?
Thanks
Sh
You can use the collateral margins for both equity and currency trading. Futures and Option writing/shorting only (no option buying).
hi , whats the margin required for doing cash future arbitrage in nifty and do this facility is available at zerodha and last i am reading a article written by IDFC mutual fund that whatever may be the condition or something else , you will always remain in profit in cash future arbitrage in nifty, is it true?
Check this link.
Where do I get list of approved securities (including ETFs) that can be pledged to create margin?
If you can email [email protected], you will get that list.
Check this link.
hi sir , sir i have asked this question so many times on trading q&a but does not get the reply , i want to know how to do cash future arbitrage in nifty 50 stocks , just like jsw energy in nse at 101.75 and on futures at 103.95, if i want to do this arbitrage hows it is possible , can it be done on intraday basis and how the transaction will be completed .
Answered here.
hi nithin, actually i today open account with zerodha but does not know from where to transfer funds and other things , is there any videos provided by zerodha for guidances , please guide , getting confused !
Nishant, there are blog posts on everything here on Zconnect. The sales person who helped you get started, will call and give you a demo.
when penalty of 1% is charged by nse , i mean if we buy a lot in futures for holding and its price decreases, then nse charges 1% penalty?
Penalty is charged by the exchange when the margin in your account is lesser than the minimum SPAN margin required for the futures. So for Nifty 10 lots, if SPAN is 140k and your account balance becomes 100k. So for this shortfall of Rs 40000, you are charged a penalty of 1% which is Rs 400. This is 1% per day.
what are the annual maintenance charges, brokerage and account opening charges if i open an account with zerodha.
Check this post.
hi within, i want to know if i write currency option on last date of expiry and if i pocket all the premium of that strike , when zerodha will release my whole amount with the premium i pocket back to my account and another thing i want to know when NSE directs the brokers only to collect the span margin from clients in option writing why all brokers with you also collects both span and exposure from clients?
Settlements in India are T+1, so you will receive all the money the next day. Exchanges ask us to collect SPAN + Exposure, they penalize for any amount below SPAN.
at what time in morning , i will recieve my amount.
before the market opening.
Hi Nitin
Do I earn any interest on any surplus cash in my trading account (back office)?
No sushil
hi , i check your span calculator , for writing one lot of currency options span is very less but exposure is very high , why that sir and whether exchange also demands so much exposure margin or it is your company risk managment policy , and whether the same thing applies in nifty options writing because i am checking NSE margin , there is no mention of exposure margin in option shorting and in currency option shorting and only span margin is mentioned there?
Arvind, whatever SPAN + Exposure we charge is what exchanges ask us to. We are one of the few members to clear with the exchanges on T day, so our margins are lower than most brokers out there. Same with currency and equity options.
whether there is anyone like its member who directly do trading with exchange gets benefit of lower margin { only span} , watching today all snap quote windows on zerodha , in 9900 CE someone is writing 85000 share at 2.10 , it requires so much capital , thats why i am asking you?
Arvind, out of the 1500 odd members on NSE, only 400 or 500 are retail brokerages. The rest are doing some kind of proprietary trading, and with decent amount of capital. So yes, there are many such professional trading firms sitting on big capital who like to short and especially out of the money call options.
The margin requirement is same for everyone.
Team,
Can you please clarify these queries?
Example: Natural gas trading at Rs 165. I want to place a buying order Rs 166 and stop loss 160 with a target 168.
Q1. By selecting product type as MIS how can I handle this situation?
Q2. Is there any extra margin required to place 3 order at the same time when none of these get executed? Plz explain
1. Buy SL-M trigger 166 , Sell Sl-m Trigger 160, Sell limit 168
2. Yes, since you haven’t taken any position, margins will be charged for the 3 orders separately. Once your position is entered, margin will be blocked for two – your open position & one of your exit orders.
I wanna know about collateral margins on Liquid Bees………..
Suppose I have some Liquid Bees which value 1,00,000 /- and I pledge those liquid Bees with you guys …
1 ) how much % hair cut you apply on this instrument ?
2) Do I need to have 10 % as cash margin in my trading account ?
3)On EOD if i have some MTM loss then how you guys manage this loss ?? does you liquid my Bees unit or manage it with Cash balance ?
4)Have I pay any interest if I pledge Liquid Bees ?
5)Does It 100% safe with you guys cz I have to sign POA of my DP account ??
6)What is the charges I have to pay if I pledge Bees ?
7)I have only trading account with you guys so I need to open new DP with you …. how Much it cost to open A/C and AMC charges ??
thanking you ……….
& Nithin you r a true youth icon ………..You r “Krishna” for Me ( & fellow traders) .. (Y)
🙂
1. Haircut is 10% on liquidbees, so if you put up 1lk, you get 90k in margin.
2. Currently we don’t ask for any cash, but it is best to keep some in the account in case of any MTM losses. If there is no cash, we will square off your position to the extent of the losses.
3. If you have cash balance, it gets adjusted with this cash. If there is no cash, liquid bees gets squared off to the extent of the losses.
4. No
5. Every broker who allows you to trade online takes a POA on the demat account. The POA is limited power and can be used only to debit shares from your demat account. This is required because when you sell shares, without the POA we will not be able to debit and provide those shares to the exchange.
6. A round trip of pledge/unpledge costs around Rs 60/pledge irrespective of how many liquid bees you pledge.
7. Yes you need to open a demat. Cost is Rs 550 which includes upfront AMC of Rs 400 for the first year.
Cheers,
Can i place an order before 9 for intraday after market(9.15 to 3.20)
Yes you can using after market order option. Check this post.
Hi,
I want to know is there any option of intraday margin trading where i can keep the position open for 5 days like the client mode trading of icicidirect. Do i need to square off my open intraday positions the same day? or can be kept open for any specific number of days, this is helpful when the market tanks sometimes and the next day is up, it helps to reduce/convert losses into profit.
Thanks
Renu, you can hold positions only to the extent you have cash in your account.
Dear sir,
as per your span calculator only Rs 10,256 enough for this spread,
i have 12k in my account but i am notable to do this. say insufficient fund???
so how much require for this spread???
best regards
m.paramaguru
Param, the exchanges give you the margin benefit only once you have taken both the positions. So you will still need to have funds to get into the both the positions individually. Once you take the position, the margin blocked will drop automatically.
Is there any company which offer client facility such as where we can use intraday margin for equity stocks and nifty futures but can also hold same position for approx 10 days with intraday margin
No vicky, no broker can let you hold F&O positions with lesser than exchange stipulated margins. For equity stocks, there are brokers who give you 2 to 3 times overnight leverage, but they charge you an interest between 15 to 24% on whatever margin provided.
Consider this scenario:
I short RELIANCE MAR2015 – 1200 call options @ Rs5 sometime in first week of March.
I do not square it o