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SEBI Registration (Research Analyst) : INH000000743
August 31, 2020
Margin and trading exposure applicable from 1st September 2020.
The changes bought out by the above circulars have been summarized below for your ready reference:
1. Upfront margin is required to be deposited with the broker before entering into any new trade or taking any new position. 2. MTM requirements are required to be fulfilled by T+1 day in case of Derivatives Segment and by T+2 day in case of Equity Segment.
In view of the above, from 1st september 2020 onwards no trading exposure shall be allowed on the following unsettled values since the same cannot be considered towards upfront margin.
1. Intraday Profits 2. MTM arising from C/F to B/F futures position. 3. Net Options premiums sold. (except against Options Buy) 4. No BTST Trades
Amidst the above restrictions, clients shall however be able to use the sell credit of the demat holding stock so sold towards any new position from T day itself.
The M-to-M losses can be deposited by you on up to T+1 day for derivatives or T+2 day for Equity, within the timings as specified by Upstox from time-to-time. Shortfall, if any, shall be liable to penalties at the rates so prescribed by the exchange from time to time.
The changes are explained below in detail -
1. Intraday Profits (all products):
Profits from Intraday trade will only be available after settlement from exchange.
For example - Suppose you bought 100 Shares of X Ltd. for Rs. 1,00,000 on 01/09/2020 and sold the same for Rs. 1,12,000 on the same day leading to intraday profit of Rs. 12,000. In this case if you wish to buy any new shares, you shall be able to purchase the new shares only to the tune of Rs. 1,00,000. (This is because the intraday profits earned to the tune of Rs. 12,000 falls under unsettled funds)
The above example shall also be valid for intraday profits earned in the derivative segment.
2. MTM arising from C/F to B/F Futures Position
For trades related to C/F to B/F Futures, profits made by selling the position will be available after settlement by exchange.
For example - Suppose you had bought a Futures contract on 01/09/2020 for a margin of Rs. 1,00,000. On 03/09/2020 the MTM profit is Rs 10,000 post square off. You would not be able to use this MTM profit of Rs. 10,000 on 03/09/2020 to purchase any new position and margin of Rs 1,00,000 will be available for any fresh positions.