Announcements

Margin shortfall penalties are effective from 1st May 2021 onwards. This means Upstox will now pass on any Exchange-levied penalties arising out of a margin shortfall to clients.

While we had initially stated that this would be effective from 12th April 2021 onwards, we extended the deadline. Hence, if you’ve got margin shortfalls, kindly fund your account immediately on the trade day itself to avoid penalties.

What does this mean?
As you are aware, in order to comply with the Exchange and regulatory requirements, we are required to collect upfront margin from all clients. As a result, clients with insufficient margins will not be able to place an order with us upfront. 

However, there could be instances when margin requirements go up after clients enter into a trade or take any actions on their current Open position(s). In such instances, clients are required to add sufficient funds to their Trading account to fulfil the resulting margin shortfall (if any).

If sufficient funds are not added and it leads to a margin shortfall on the trading day (T day), then the margin penalty levied by the Exchange would be passed on to such clients (this will reflect in the client’s ledger). If the shortfall continues on T+1 day, subsequent action as per the Upstox risk policy would also be applicable.

What are the few instances when margin requirements could go up, that clients need to be aware about?
Here are few examples* when margin requirements could move up:

1. A leg of a hedged position squared off by client or a leg of hedged position expiring leading to an increase in margin requirement.
2. While the margin rate remains the same, an increase in price leads to an increase in margin requirements.
3.  A change in the initial margin rates due to high volatility in any stock or scrip leading to an increase in margin requirement. 

What should you do to avoid margin shortfall penalties?

1. Keep track of the margin requirements. You can view any shortfall in your funds from the Upstox mobile app or web platform. You can view the shortfall on the ‘Funds’ screen under the ‘Available to Trade’. If the amount here is negative, then you are in a shortfall. 
2. In case of a shortfall, please add funds to your account immediately. You can add funds instantly on Upstox via UPI/NEFT/RTGS/IMPS. 

*These are only a few examples; there can be other scenarios as well.