As per SEBI circular SEBI/HO/MRD2/DCAP/CIR/P/2020/
Here is a summary of the changes and point you’ll need to keep in mind before placing orders:
Dec 2020 to Feb 2021
There is a penalty if margin blocked is less
For equities, 25% on VAR + ELM or 20% of the trade value (whichever is lower).
For futures and options selling, 25% on the SPAN + exposure margin.
thus need to maintain margins on all order- this minimum margin would be in cash or can use 100% margin against your shareholdings and place orders to trade in F&O and equity even at zero cash balance.
Selling Delivery Shares
If you sell stocks from your Demat or BTST, only 80% credit against the sale value will be available for subsequent trades in the same/other segments on the selling day.
The reason for this is because we are now required to block 20% of selling credit as margin until we can debit the shares from your Demat and make it available to the CC (Early payin or EPI).
Also, if you’ve sold 100 shares of TCS that you hold in your Demat account, you will only be able to buy back 80 shares of TCS during the day.
If you don’t have any other funds/margin in your account.
Always first exit the High Risk(margin) leg of a portfolio of F&O positions
Assume you have sold 1 lot of Nifty futures and bought 1 lot of Nifty calls.
The margin required for naked Nifty futures is approx. Rs 1.5 lakhs, but since you also have bought the Calls which cover the risk completely, the margin required drops to Rs 30,000 approx.
Assume you have Rs 1.5lks in your account and that you bought some stocks with the remaining Rs 1.2lks in your account.
The only margin remaining is Rs 30,000 against which you hold 1 Nifty short future and 1 Nifty long call.
If you now exit the Nifty long call position first, the margin requirement for 1 lot Nifty future will go back up to Rs 1.5lks as the position isn’t hedged anymore.
While you might exit the short Nifty future immediately, but the margin in your account until you exit is only Rs 30,000 against which you hold 1 Nifty future.
That means that there potentially can be a peak margin penalty on the Rs 1.2lks that you will be short at this time.
Don’t use holding sell credit for intraday trades if you plan to buyback the holdings
If you sold 100 shares of TCS @Rs.2500 from your Demat and you have no other margin, you will now be able to use only Rs 2lks and not Rs 2.5lks.
If you used this Rs 2lks to intraday trade (Buy & Sell) 1 lot of Nifty futures and also bought back Rs 2lks worth of TCS shares that you had earlier sold on the same trading day.
Thus, there can potentially be a peak margin penalty for the intraday Nifty future trade.