Wednesday, January 5, 2022 8:17 pm
As per SEBI’s peak margin rules, when you sell your stocks from your Demat Holdings, on the same day you can use only 80% of the proceeds to -
- Buy back the same stocks or any other stocks
- Use the funds for intraday trades
However, If you exceed the available credit while placing the above two orders on the same day, there could be a margin shortfall and margin penalty may be applicable.
Example:
-
Let’s say you have 20 shares of ABC in your Demat and you sell them at say ₹1500 per share. From this sell transaction, you can use only ₹24,000 and not the entire ₹30,000.
-
Now, let’s assume you use the ₹24,000 to take both an equity delivery position and also an intraday F&O position on the same trading day. Then a peak margin penalty could be applicable on the intraday F&O trade if you don't have sufficient funds available other than the ₹24,000 credit from selling your holdings.
-
The penalty amount varies on the amount of shortfall.
-
Hence, in order to avoid incurring this penalty, kindly ensure that you have sufficient funds in your account at all times before placing such a trade.
