Why did I get an SMS/email regarding provisional shortage of cash for my derivatives position? What does it mean?
If you have open derivatives positions, you may receive the following SMS/email regarding interest charges:
Please note provisional shortage of cash component against your derivative margin (based on terminal usage) is Rs. XXXXX for which interest may be charged. Actual amount will reflect once exchange files are posted, please check the ledger on T+1. Thank you.
- For derivative positions, a minimum of 50% of the margin requirement must be maintained as cash balance in your trading account. The remaining margin can be maintained as cash of approved pledge collaterals.
- Interest is charged on cash margin shortages @ 18% starting from the day after the settlement day. If the cash margin in your account goes below the 50% requirement at any point in time, interest will be charged @ 18% on the shortage amount.
- If there are any other debits, interest will be charged accordingly.
- The above-mentioned interest is charged on a daily basis and posted to your ledger.
1. The SMS/email is only sent to clients with a shortage in the cash component for open derivatives positions.
2. These figures are arrived at based on margin requirements for positions taken on SELFIE / TraderX. Positions taken outside SELFIE / TraderX will not reflect in the amount given in the SMS/email intimation.
3. The figures are determined after trading hours and hence approx margin requirements are taken for equity derivatives and currency derivatives positions. For commodities, margin usage till 6:00 p.m. is considered; please keep this in mind while using margins for commodity trades.
4. On receipt of the SMS/email, please transfer the required amount to your account before EOD to avoid margin penalty charges.
5. The final margin requirement and shortage figures can be viewed in your ledger from T+1.