Zerodha Part 2

[suraa21]

I want to question using an example.
Suppose I want to buy(long) 1 lot of Nifty Future at 25000(approx) buy at 5650. next day the future is down at 5500 ( Loss of 150 points).
now do you(as per RMS) hold the Nifty future or Square off.
My SL is at (I want to hold it till ) 5450.
does ZT allow us the same or it will Square off the future at 5500.saying your loss is 15000 and Exchange margin is 25000 per lot of Nifty future & my balance is 10000.
Please confirm whether it is correct.

This is just normal carry forward trade. Not any Intrady/margin trade. I do not really like to discuss my trades on a public form, but I could not get clear reply,I'm posting here.

 

[suraa21]

Second scenario:
In the above example, if my trade is correct and nifty rise to 5750,then my profit is 10000, should be shown as MTM profit for the next trading day.
If the position is carried one more day still and nifty rise to 5800,then 5000 will get added to MTM with no real addition.
Now do you allow the trader to buy one more nifty future with the 15000 MTM to trade for Intraday or ask him to square then trade with the amount 25000+15000.

This is clearly a problem in the RMS/backoffice/MTM settlement, if you compare the Currency trade with the above example.

 

[timepass]

Second scenario:
In the above example, if my trade is correct and nifty rise to 5750,then my profit is 10000, should be shown as MTM profit for the next trading day.
If the position is carried one more day still and nifty rise to 5800,then 5000 will get added to MTM with no real addition.
Now do you allow the trader to buy one more nifty future with the 15000 MTM to trade for Intraday or ask him to square then trade with the amount 25000+15000.

I have seen this with another broker, where your profits/ losses are adjusted immediately with your available margin, and that margin is available for trading. Not a discount broker though.

 

[Zerodha]

I want to question using an example.
Suppose I want to buy(long) 1 lot of Nifty Future at 25000(approx) buy at 5650. next day the future is down at 5500 ( Loss of 150 points).
now do you(as per RMS) hold the Nifty future or Square off.
My SL is at (I want to hold it till ) 5450.
does ZT allow us the same or it will Square off the future at 5500.saying your loss is 15000 and Exchange margin is 25000 per lot of Nifty future & my balance is 10000.
Please confirm whether it is correct.

This is just normal carry forward trade. Not any Intrady/margin trade. I do not really like to discuss my trades on a public form, but I could not get clear reply,I'm posting here.

Suraa, we usually run RMS square offs 15 to 20 minute before closing of the markets. For example, in your yesterday's position also we would have squared off only after 4.45pm for currency, until that point even if the margin required drops to around 35% of overnight margins we would let you hold your positions(in case of equity f&o) and around 60% for currency positions. But before the end of the day, we are forced to square off as per NSE short margin penalty to the extent the funds in your account can hold.

Scenario 1: Depends on what product you use to buy nifty future.

With MIS margin blocked will be around 11000 and around 25000 with NRML.

If you loose 7500 if bought using NRML, we will let you hold because there was 25k blocked for it.

If you loose 7500 with just 11000 blocked for MIS position and this is the only amount in your account, we definitely would square this off, because technically you would be left with around 4k..

if you loose 15k, which is 300 points, then normal carry over trade which requires around 25000, you are left with only 10000, so yes this would be on the verge of being squared offi if during the day, but after 3.10pm, it definitely will be squared off...

 

[Zerodha]

Second scenario:
In the above example, if my trade is correct and nifty rise to 5750,then my profit is 10000, should be shown as MTM profit for the next trading day.
If the position is carried one more day still and nifty rise to 5800,then 5000 will get added to MTM with no real addition.
Now do you allow the trader to buy one more nifty future with the 15000 MTM to trade for Intraday or ask him to square then trade with the amount 25000+15000.

This is clearly a problem in the RMS/backoffice/MTM settlement, if you compare the Currency trade with the above example.

Yes if you have an MTM profit we will give you credit to take a fresh position, but only once you have booked that MTM profit. Not on notional profits.

What this means is if you bought nifty yesterday, closing yesterday is 5700 , today at 12pm it is 5800, you have notional profit of Rs 5000, this notional profit cannot be used to enter new position. But if you exit your nifty future at 5800, the profit is booked and hence you will get credit to take a new position..

Same case in Options, if you bought at Rs 100 and sold today morning at 120, you can take positions for entire 120...

 

[timepass]

Yes if you have an MTM profit we will give you credit to take a fresh position, but only once you have booked that MTM profit.

Once he books it, it is a part of his capital, and not MTM anymore :lol: :lol:

 

[Zerodha]

Once he books it, it is a part of his capital, and not MTM anymore :lol: :lol:

Technically not TP..

All f&o settlements happen on T+1, so what it means is that if you sold a position with profit, booked that MTM profit, it is not yours until tomorrow..

So if a broker is letting you use that credit to buy more, he is doing out of his funds lying at the exchange..

 

[vikrit]

Yes if you have an MTM profit we will give you credit to take a fresh position, but only once you have booked that MTM profit. Not on notional profits.

What this means is if you bought nifty yesterday, closing yesterday is 5700 , today at 12pm it is 5800, you have notional profit of Rs 5000, this notional profit cannot be used to enter new position. But if you exit your nifty future at 5800, the profit is booked and hence you will get credit to take a new position..

Same case in Options, if you bought at Rs 100 and sold today morning at 120, you can take positions for entire 120...

what about next day, if nifty close on 5800 today, then tomorrow you add that 5000 MTM in limit or not? in my experience with other brokers next day limit is yesterday balance + mtm settled!!?? right?

 

[timepass]

Technically not TP..

All f&o settlements happen on T+1, so what it means is that if you sold a position with profit, booked that MTM profit, it is not yours until tomorrow..

So if a broker is letting you use that credit to buy more, he is doing out of his funds lying at the exchange..

Ditto with losses ?? If he books his position in loss, does his capital get reduced immediately or not ?? Can he continue to trade with it (pre-loss amount) till EOD ??

 

[Zerodha]

what about next day, if nifty close on 5800 today, then tomorrow you add that 5000 MTM in limit or not? in my experience with other brokers next day limit is yesterday balance + mtm settled!!?? right?

Yep that gets added next day morning, you can take that 5k and do whatever, withdraw it and go for a party...