Calculating a MTM on cash position

Here's an example for calculating MTM on cash position:

Assume the cash available margin = 20,000

Upstox provides 5x Margin on F&O Stocks.

Assume we are dealing with a F&O Stock; therefore, total exposure is 100,000 for intraday.

Assume the trader buys 100 shares of Reliance @ Rs. 1000, and later sells all 100 shares at Rs. 900

He is now incurring a (100 shares x – Rs. 100) = Rs. 10,000 loss

Compared to his actual capital with Upstox his MTM has breached 50% (20,000 – 10,000)/20,000 = 50%.

At this point in time Upstox will give the client a warning, and for every incremental 10% MTM loss will keep issuing warnings. At 80%, the client is either forced to deposit more funds or Upstox will begin squaring off positions.

What is MTM on cash position?

Mark To Market measures the value of an account in terms of the changes that take place over a period of time in the value of assets and liabilities. It is a way to measure the real market value of a security vs. its value in the books.

Learn more about the types of margins that Upstox offers.