Can you provide an example on calculating MTM on a Cash (Equity) position?
Below is an example for calculating MTM on cash position
- Assume the cash available margin = 20,000
- Upstox provides 5x Margin on FNO Stocks. Assume we are dealing with a FNO 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 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.
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