can

 

Different Product Types found in 

Order Form





Watch Video to know what each order means


 


NOTE

NRML for Equity Cash segment and Cover Order are available only in Rocket Plus



What is the Margin required under each Product Type?

 


 IMPORTANT NOTES


NRML for Equity Cash segment and Cover Order are available only in Rocket Plus


CNC in Rocket Plus requires 100% of traded value


CNC in Rocket requires 50% of traded value in selected stocks & 100% of traded value for all 


other stocks




When will my Intraday Positions (MIS/CO) be squared off?



Any order placed under MIS and CO will automatically be squared off within half an hour before the market closes for respective exchange segments  or any other time as mentioned from time to time depending upon the market volatility  OR when the Intraday MTM reaches 60% whichever is earlier. To read our complete risk management policy click here.



What will happen if I do not pay full amount towards my purchase obligation?


If the securities received in pay-out are not paid fully,  Navia may retain those securities in "CLIENT UNPAID SECURITIES ACCOUNT (CUSA)" and these securities will be transferred to the respective client’s demat account on receiving full purchase value. Further, if the funds are not fully paid within four trading days (4) from pay-out day(T+2) then Navia shall liquidate the securities in the market to recover the debits/dues in the account including the penalty/interest/ Dp charges/ any delayed payment charges etc.. Also, note that there will be an interest levied on the debit amount for the days for which it is not paid. This interest amount will be debited to ledger 



Can I convert my position from Intra day to Carry forward?


You can change your positions from MIS (Intra) product to the NRML /CNC (Carry forward product). However, this can be done only if you have sufficient margins for the Carry Forward position. The change of position needs to be done atleast 30 minutes before market closing time or before the time based auto square off gets triggered.


You can also change NRML positions to MIS. You cannot however do this once the auto square off process is started.

What is Margin?


Margin is the Up-front amount required to be maintained by a client before he takes a position. This Margin is decided by the Exchange and differs from Segment to segment. Let’s see the broad framework in which this operates for different segments



 

NOTES

At Tradeplus, we collect a minimum of 20% of Traded Value only for Intra day trades in Equity


 segment. It differs for Delivery based trades 



Illustration





What is Peak Margin?


Now we know what is Margin. Let us go to the next step to understand what Peak Margin is. It is nothing but the highest Margin required by a client on any given day. To determine the highest margin, the Clearing Corporation randomly takes minimum 4 snapshots of the margin required on a given day. The highest of the 4 snapshots is the peak margin which the client should have maintained during the day.

 

Let’s see it with an example

 

Image you have bought a Nifty 17350 in the morning with a balance of 1.5 lakh in your account. As mentioned above, the Clearing Corporation will randomly take minimum 4 snapshots of the margin required for the position during the day and the margin requirements in all these 4 snapshots could vary   as given below





The highest or the peak of all the 4 snapshots is 1.06 lakhs and that is the Peak 

Margin 
Requirement. 




What is the difference between Peak Margin and End of Day or EOD Margin?


Peak Margin is the highest margin required on a given day. End of Day margin is the margin prescribed by Exchange at the end of Trading day.



Will I be intimated about my margin shortfall?


Definitely.

 

You shall be intimated about your margin shortfall through a report that will be emailed to you every day from our Back Office to your registered email address.

 

We shall endeavor to send you an SMS to your registered Mobile number the moment your margin shortfall exceeds 25% during the trading session. However during periods of high volatility this may not be possible. 

 

Please note that at times of high volatility there will be hardly anytime for you to react, hence we suggest you to maintain sufficient margin in your account at any point. 




Is provisional margin shortfall penalty

debited to my account? When will it be reversed?



No. The provisional margin penalty is not debited in your ledger. Rather, this amount gets blocked in the trading terminal to avoid over utilization of margin. However, on the date of receiving the exact margin penalty from the exchange, the same is debited to your Trading Leger.



Are cheque payments are considered for margins?


No. Unrealized cheque payments will not be considered for the margin/MTM shortfall. You should do an online funds transfer to hold such positions.


Why was I debited with Margin Penalty?

Whenever the margin available with you exceeds the margin required as per the Exchange, then there is shortfall. For every shortfall, the Exchange levies penalty and this penalty will be debited to the ledger if the shortfall is not covered by you.



This might arise in the following scenario 



When the margin prescribed by the Exchange increases than what it was when you took the position. Let’s assume that you had a balance of 1.10 lakhs and had taken a position in Nifty Futures that had a margin requirement of 1 lakh on 10th of Feb. If due to high volatility, Exchange increases the margin from 1 lakh to 1.12 lakhs on 12th of Feb, you will be under shortfall, if you do not bring in additional 2k.


Shortfall can also arise if there is a M to M loss on the position held. This will reduce the available margin thus widening the difference between the margin required and margin available.


If you had created a hedge and had separated one leg of the hedge subsequently. To understand this, we need to first understand what is hedge


What is a Hedge?

Hedge is a protection created for your trading in the event of market turning against your expectation. If you had a long position in Nifty you are un-hedged but if you buy a PUT Option simultaneously, you are then hedged. This is because, if market falls, the loss in Nifty long position will be limited as your PUT will start making money. This is called a hedge.


To encourage traders to take positions with due protection, SEBI has provided huge margin benefits to those who trade with hedge strategy. A hedged position can reduce your margin requirement as much as 70% or even more.



Illustration









As seen above, a unhedged position i.e, Sale of 17100CE requires a margin of 120559.3 while the sale leg hedged with a buy CE drastically reduces the margin requirement from 1.2 lakhs to 22951. 

 

This is just an illustration and the reduced margin requirement could be even lower. This is the great benefit of Hedging. 

 

Now coming back to scenarios when Margin shortfall arises, the margin requirement doesn’t change majorly as long as the hedge leg stays. The moment one of the hedged leg is removed, it shoots up. Here, if you Buy call leg, the margin requirement will then shoot up from 22k to 1.2 lakhs. This might even occur, if your buy leg expires on the weekly expiry provided you had taken a weekly expiry Call option but retain the sell leg with monthly expiry.  So, we suggest you to ensure that you have sufficient margin before you remove one of the hedged leg to avoid penalty or close both the legs simultaneously



How is the Penalty Calculated?


Penalty is levied whenever the available margin is less than the required margin. Here is the % at which penalty is levied as per the Exchange




If shortfall continues for more than 3 consecutive days, then penalty of 5% of the shortfall amount shall be levied for each day of continued shortfall beyond the 3rd day of shortfall.

 

Eg. If there is a shortfall on 1st, 2nd, 3rd and 4th of a month, then the penalty will be calculated at 5% on the 4th day.

 
If shortfall takes place for more than 5 days in a month, then penalty of 5% of the shortfall amount shall be levied for each day, during the month, beyond the 5th day of shortfall.

 

Eg. If there is a shortfall on 1st, 8th, 11th, 14th, 20th and 26th of a month, then the penalty will be calculated at 5% on the 26th day. Read here to know more on penalties.


Can I pledge a stock to get additional margin?

You may use the stocks held in your demat account to get additional margin to buy stocks in Equity segment (via MTF) or to take positions in derivative segment. Read here to know more about MTF trading. 


 

Here, we will see how much leverage will be added to you in F&O segment if you provide stocks as collateral. There are 2 basic points which needs to be noted here.
 

 

Value of stocks after haircut as only that value will be added as collateral limit

Cash : Collateral ratio available. At any point, minimum 1/5th or 20% of the collateral value should be available as cash i.e., the ledger credit.

 

Let’s understand this with an example




You may notice here that as the ledger credit reduces the collateral value considered to provide limit also reduces. This is because, at any point of time, minimum 20% of the stock collateral value should be available as clear ledger credit.  In other words, the cash collateral ratio at any point of time should be 1:5. In scenario 3, the ledger balance is just 5.6% of the total stock collateral. Hence, the limit provided based on stocks pledged is restricted to 100000 which will make the cash collateral ratio to 1: 5 

 

NOTE

 
ICICI BANK and ICICI Prudential shares will not be accepted as collateral

 

 

 

What will happen if the stocks I gave 

as collateral moves out of EQ series OR 

its haircut increases to 100%?

 

If any of the stocks that you had given as a collateral moves out of EQ series or if the haircut of the stock increases to 100%, then it becomes ineligible to be a collateral. It will therefore, be removed from pledge and moved to your Demat account. 

 

Your collateral value will therefore, gets reduced as one of the stocks that you had provided as collateral is now removed.  You will in such a scenario be required to bring in additional funds or other eligible collateral stocks to maintain sufficient margin against the position, if any, you had already taken based on the old collateral value. 


Will I be allowed to use the profits I have 

made in F&O Trading for further trading 

on the same day? 

 

As per SEBI Regulations, settlement cycle for derivative segment (F&O) is T+1 day. This implies that if you make profits trading in derivative segment (F&O), it will be settled on T+1 day only.

 

Therefore, if you take an F&O position & make profits, we will not consider the profits made on T Day while reporting margins to the Exchanges, as they are realized on T+1. These profits will not be clear balance on that day, and thus won't be considered as available margin for trading in F&O.