You could have come across a situation where you were blocked from taking fresh positions in derivatives segment, even after you had sold any or all your existing positions and have sufficient sale value in the trading terminal.

 

This would happen in a scenario as illustrated below. Let's assume that you had an Options carry over position.

 

Flow of events


Value of Carry forward Options positions   1 lakh
Uploaded Cash Margin5000 (Opening)
Value of sale on squaring off the carried forward position 85000

Take fresh positions using 85000 and do multiple intraday trades


Loss booked on the Intraday trades
15000
System will immediately block fresh trade


 

Reason for blocking in spite of having a net sale credit of 75000 (5000 of Opening balance+ 85000 of Sale proceeds -15000 of M-to-M Loss)

 

  • As per our RMS Policy, M-to-M loss of 15000 is due for payment on T date  (same date of Trade)
  • The sale proceeds of 85000 is however due from Exchange of T+1 date (Trade date + one Working day)
  • The available balance of 5000 is insufficient to cover the M-to-M loss of 15000 .  
  • Therefore, there a shortfall of 10000 to clear the M-to-M loss on the same day

Hence, fresh positions will immediately be blocked to adhere to Regulatory norms.

 

 

Alternate Solution to take fresh positions

 

In this scenario, we suggest you to make a pay-in for the portion of M-to-M loss that is still not covered. In this case, it is Rupees 10000 (15000-5000). The system will immediately unblock for fresh trades

Else, you may wait for a day and then take fresh positions.



Also Read


Why am I blocked from trading in certain Options and futures Contract ?