Table of Contents
What is the penalty for margin shortfall?
If the overnight margin is less than 1 lakh and the margin shortfall is less than 10\% of applicable margin then, 0.5\% of penalty is levied and in case if the margin exceeds 1 lakh or the margin shortfall exceeds 10\% of applicable margin then, 1\% margin is levied on the margin shortfall.
What is new margin rule?
The Securities and Exchange Board of India (Sebi)’s new mandate in margin trading, which was brought into effect last year in a phased manner, has increased upfront requirement to 100\% from Wednesday. Sebi hiked the upfront margin requirement to 50\% from 25\% from 1 March 2021 and further to 75\% in June.
Will Sebi withdraw margin rules?
For SEBI, complete withdrawal of margin rules is not planned. SEBI will never want to withdraw total rules they brought otherwise it may dent their image too.
Will SEBI’s new peak margin rules impact intraday trading margins?
SEBI’s new peak margin rules are likely to impact the intraday trading margins as it comes into effect. It was introduced in 2020 by the market regulator and was implemented in a phased manner.
What are the new margin rules for day traders?
In 2020, Sebi introduced the new margin rules for day traders under which stock brokers were now mandated to collect minimum margins on leverage-based trade upfront as against the earlier practice of collecting it at the end of the day. The margin rule has been introduced in phases so far and from September 1, the last phase will go into effect.
What is the second order effect of SEBI’s new rules?
The second order effect of the new Sebi rules is substantial for day traders in the market. The implementation of the peak margin rules curtails the leverage that traders can get from their brokers to execute a trade in the market.
Why is the margin getting reduced in intraday trading?
The margin are getting reduced to safeguard your money. Because, 30-35 percent of the intraday turnover is based on additional leverage provided by brokers, this means after the implementation of this circular the brokers as well as exchange will going to incur a loss, due you really think this is what they want to do.