Additional Surveillance Margin in Equity Derivatives Segment

[OneThatGotAway]

link https://www.nseindia.com/content/circulars/CMPT38768.pdf

NSE has recently circulated two circulars which may have an impact on your trading/ trades placed by you.
Summary of the circulars is as below:
Additional Surveillance Margin: According to the circular released, for all trades done in derivatives segment, clients will now be required to pay additional surveillance margin on futures contracts and on short positions in options contracts. This is addition to existing initial and exposure margin.
These charges will be effective from the dates mentioned below:
Effective Date of ImplementationIndex OptionsIndex FuturesStock Options and FuturesSeptember 14, 20181.00%0.50%1.25%September 28, 2018 2.00%1.00%2.50%October 26, 20183.00%1.50%3.75%November 30, 20184.00%2.00%5.00%
Delivery Margin on Stocks Physically Settled: For all potentially ‘In the money options’ position in Physically Settled contracts, an additional margin in the form of delivery margin will be charged by the Exchange, starting from 4 days prior to day of expiry of the contract.
The delivery margin will be charged in a staggered manner as under:

• 20% of Delivery margins computed on Expiry - 4 EOD
• 40% of Delivery margins computed on Expiry - 3 EOD
• 60% of Delivery margins computed on Expiry - 2 EOD
• 80% of Delivery margins computed on Expiry - 1 EOD

We would urge you to take note of the above circulars and maintain sufficient margins to avoid liquidation of your positions and short reporting of margin.

so trading to get more costlier ? and we have to pay 0.5% more margin on futures BS ... They killing the meaning of leverage.
How about giving free hourly or 5 min data to all members as u already leech stt and other taxes ....

 

[bpr]

there is a amendment circular by BSE
https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20180912-42
anybody know what this is ?

 

[VJAY]

This one got from Zerodha...

Following are the updates in our margin policy due to below changes from the exchange

Increase in F&O margins due to exposure margin increase

As stated in this circular from NSE, Additional Surveillance Margins shall be made applicable in phases starting from 14th September 2018. This will mean that:

1. In addition to Initial margin and Exposure margin currently applicable, an Additional Surveillance Margin (ASM) shall be levied on all gross open positions on futures contracts and on short positions in options contracts.This shall be effective from the dates mentioned below:

* In case of Out-of-the-money index options contracts, the ASM shall be restricted to 2% only. For this purpose, Out-of-the-money index options contracts shall be defined as options contracts with strike prices which are out-of-the-money by not less than 5% away from the previous day closing price of the underlying Index.

2. The above-mentioned ASM shall be added to the applicable exposure margin of the respective index/stock futures and options contracts. Hence exposure margins required to trade will go up from 14th Sep 2018. Make sure to have sufficient margins for your F&O positions. Any shortfall in margin will attract margin shortfall penalty and may be squared off at the discretion of our RMS Team.

Refer to this article for more information.

Margin requirement for Long/Buy option positions in compulsory physical delivery contracts

From September expiry onwards, exchange has mandated that margins be blocked for long options (Call & Put) 4 days before expiry (i.e Friday EOD - the week prior to expiry week) on any compulsory physical delivery contract. Currently there are 45 stocks which are settled with actual delivery of stocks, this list is going to increase to cover all stocks on F&O in the next few months. Check this listto stay updated on stocks which are to be compulsorily settled physically.


Margins are asked to ensure that clients with long options have sufficient funds to either take or give delivery of the underlying stock on expiry. The delivery margins applicable will be a percentage of the VAR + ELM margins (Check out this NSE FAQ to know more about VAR & ELM). The delivery margins will be applicable in the following manner.

On the expiry day, you are required to maintain 50% of the contract value(or SPAN+Exposure), whichever is higher. Make sure to keep sufficient margin to ensure your positions don't get squared off.

 

[Tuna]

The brokerage house can offset this by lowering their baseline of margin requirements - if they want. Can not they?

 

[abhay.fintech]

Has anyone noticed Zerodha charging a separate ASM margin from 24 May 2019 onwards?
My understanding until now was that ASM is included as part of SPAN margin itself.
But for the 1st time on 24 May 2019, Zerodha Charged me 3 different kinds of margin - ASM, SPAN and Exposure, which is much higher than earlier day's SPAN +exposure.
Am I missing something here?

 

[Umar_Ahmed]

@abhay.fintech They blocked additional margins for physical delivery contracts bro.
This is done for the last week of expiry. Check this.