Modified on: Sat, 15 Oct, 2022 at 11:18 AM
Restriction on Available ledger in Rocket
Due to Exchange guidelines restricting brokers from debiting margin shortfall penalties to clients we are forced to take this step of restricting Ledger balance usage to 99% in Rocket trading platform. This means that if you have Rs. 10,000 in your ledger as free balance you would be able to utilize upto 99% of this amount or Rs. 9,900. The Rs. 100 is used as a buffer in case of increase in margins after the position has been taken by the client to prevent margin shortfall and penalties.
We also come across situations where clients who buy out of the money Options especially on expiry day use 100% of their ledger balance and lose all the amount as the options expire at zero on expiry day. As a result of this the charges of the transaction like Exchange and SEBI turnover charges, Stamp duty and STT are left unpaid by the client. To avoid this scenario also we have introduced restricting ledger balance usage in Rocket platform to 99%
Collecting extra 5% margins in Rocket Plus Platform
Due to Exchange guidelines restricting brokers from debiting margin shortfall penalties to clients we are forced to take this step of collecting extra 5% margins in Rocket Plus trading platform. This means that if you have a position that requires Rs. 50,000 as exchange stipulated margins, then our system would require extra 5% or extra Rs. 2500 as margins totaling to Rs. 52,500. The extra margin is used as a buffer in case of increase in margins after the position has been taken by the client to prevent margin shortfall and penalties.
Max Net Exposure to 1 Cr in Rocket Platform for Commodity Trades and
Max Order Value to 1 Cr. in Rocket and Rocket Plus Platform for Commodity Trades
We have set Max Net exposure to Rs. 1 Cr. for Commodity trades in Rocket Trading Platform. Due to segregation of margins requirement of the regulators we have to report client balances in different segments to the exchanges and allocate the same at clearing corporation or Clearing member end. We have to do this at the beginning of the day. We have no idea in which segment the client will utilize the balance so we allocate the amount based on the last traded segment. However in the Trading platform we allow clients to utilize the same funds across all segments including Commodity segment. Many brokers require that you separately allocate funds for commodity segment but we allow you to use your equity/equity derivative/currency derivative allocated fund also for Commodity trading. This exposes us to a risk of sudden large trades in Commodity by clients whose funds are allocated in equity/equity derivative/currency derivative segment at the CC or PCM level. To safeguard our interest here we have restricted Max net exposure to Rs. 1 Cr. in Rocket Platform for Commodity Trades and Max Order value to Rs. 1 Cr. in Rocket and Rocket Plus Platform for Commodity Trades. This does not mean that you cannot have a higher than 1 Cr. net exposure. It only means that you would first need to intimate us, and we will do a re-allocation of your funds to the CC/PCM and then enhance your limit to take higher exposure.
Depository Holding Max Sale limit restricted to 1 Cr in Rocket Platform
For every security you sell from your DP account margins are required at the exchange. However at Tradeplus we do not collect margins from clients to sell their DP holding securities. Now with the introduction of segregation of client collaterals by the regulators which is explained above we are forced to set a 1 Cr. Sale limit on DP holding. This does not mean that you cannot sell your DP stocks above 1 Cr. in value. It only means that you would first need to do early payin to block DP stocks towards obligation after which we will enhance your DP sale limit
Restriction to un-hedge partially in Rocket Plus
If you have a hedge position the margin requirement comes down. So when you try to partially remove the hedge the margin requirements may increase substantially. Our Rocket Plus system would not allow you to partially un-hedge if your account is resulting in a margin shortfall due to partial hedge removal. Such orders will be rejected by our RMS.