From July 1st, 2018, for any overnight positions, clients need to maintain both SPAN + exposure margin in their account. Previously SPAN margin amount was mandatory for overnight positions, but with new changes with SEBI Circular, now client need to manage both SPAN + exposure margin.
Let’s take an example – For buying one lot of NIFTY Future SPAN = 40,000 and Exposure Margin= 25,000
So in earlier scenario client need to maintain only 40,000 in his account, but with new changes, he needs to maintain 65,000 in his account.
Will this change impact Intraday Trades (MIS/CO/BO positions)?
By rules, this is not impacting Intraday margin, circular is only for NRML/overnight positions , but this can indirectly affect the Intraday margin. Let see how…
Previously Total margin requirement for overnight position was = SPAN (40K) = 40K
New Changes in Total margin requirement for overnight position is = SPAN + Exposure Margin (40K + 25K) = 65K
For Intraday positions, previously broker need to safeguard with SPAN margin amount but when we see Intraday scenario, broker is giving you up to 60% and asking clients to bring 40% of SPAN + Exposure margin, As this trade will square off by EOD, in this example broker was asking 25K from you and keeping 15K from his pocket to execute this trade with exchange.
As now broker needs to keep 65K with exchange form intraday trades also, you will see slight changes in Intraday margin policy. Zerodha has increased his number from 40 to 50% now, where SAMCO was previously giving 2x margin.
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