@funatlearn Margin is applicable irrespective of intraday trade or delivery trade. They are just product types. For 5 lakh margin requirement, 2.5 Lakh has to come from cash at least and remaining could be from non cash.
Case 1: 3 lakh cash and 2 lakh non cash: In this case the margin requirement is fulfilled and hence no interest
Case 2: 2 lakh cash and 3 lakh non cash: in this case the cash margin should be at least 2.5 lakh but since it is short by 50,000 it will be the brokers money which will be blocked by the exchange and since our money is blocked, we charge interest.
Thanks i am getting some clarity on my scenario.
I am referring to Case 2.
Case 2.1. Used margin, but Squarred off (no delivery)
Case 2.2 Used margin on expiry trade, (did not square off), but trade settled same day.
Can you confirm if you charge interst in these 2 scenarios (I am doing similar trade with one other broker, and they are not charging for these 2 scenarios)?
As per the first post in this page, can you explain the meaning of last line. As per this, i think, interest should not be charged for both above scenarios.
But when you take a trade or have an open position - which is part funded by your cash (upto 50% minimum) and rest with broker’s money - then for the usage of these broker’s money - there is an interest amount that is charged - which is commonly referred to as DPC or Delayed Payment Charges. This will be applicable only for the time when your trades use broker’s money and these positions are not exited / settled.
@funatlearn To begin with, margin is always paid upfront. Meaning for any trade (be it OTM expired or ITM assigned or physical delivery in futures) the margin money has to be paid upfront. In both of your cases, you have entered a trade (one squared off and other for settled) hence margin was blocked and thus DPC applicable.
This will be applicable only for the time when your trades use broker’s money and these positions are not exited / settled.
Can you also explain on what is meant by above? It suggest to me, interest should not be charged when positions are exited/settled. Please elaborate which scenarios are being referred here.
If we get into a position at 10 am and exit by 11 am on the same day, then as per the above comments, I think we will be charged 1 day interest. That is not a good thing to have.
I have seen many brokers charge interest only if we carry forward the positions to the next day.
Exactly my point and my experience with other broker.
Other broker did not charge interest. Dhan charged interest despite mentioning charges are applicable only when positions are not settled/exited.
Each broker has different set of rules as per their risk management policy, so this may vary from broker to broker.
Yes agreed.
I am finding rules a bit different by different brokers. Some are not charging interest and some are charging interest. Also interest is not uniform across the brokers.
@iamshrimohan can you suggest where can I see the actual shortfall ( of 50% cash component) during the day.
Additionally If there is a shortfall, is there a way to avoid interest charges if I bring in additional capital?
Example 2l cash , 3l non cash margin is used at 10:00am and exited by 11:00 am. If I add 1L funds by 10:10 am (making it 50:50), will there be interest applicable?
@funatlearn in that case interest will not be charged. So the systems work this way - You place an order at 10:00 and exit at 11:00 (say) - Our funds were blocked for the duration of 1 hour but there wont be any interest because while doing the billing, we consider the clear ledger balance just before billing. As the payment is made, the ledger balance will factor that in.
And what time the billing system check?( I.e. till what time we can add funds)
Post market hours. After 5 PM
I have a question, Can we trade intraday Option buying and Selling using Collateral Margin. Is 50:50 rule applicable in this case also, This is purely for Intraday. Please confirm
Hi @sindhum1406 welcome to Dhan community!
In case of Option buying there is no requirement of 50:50 margin. Moreover, for intraday Futures or Options selling 50:50 margins will be required.
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