What would be the effect of EOD MTM on margin blocked at position level?

Yes, EOD MTM does have its impact on margin at position level. Margin is re-calculated at the closing price at which EOD MTM was run and differential margin is blocked or released as the case may be. For margin calculation, the presentsame IM% and spread margin % is taken. To provide sufficient margin on open position after EOD MTM, ensure that suffecient allocation is available under F&O segment. You must visit the allocation amount for F&O on daily basis and allocate further if present allocation is found insufficient.

Due to daily MTM and payin/payout, allocation amount for F&O may come down over a period of time and because of the same, open position may fall in MTM loop and may get squared off unless you allocate fresh amount for F&O. Payin amount is debited from allocation you make for F&O but payout credit is always given in your clear balance. . What is meant by “Split of Contract”?

Seven calender days prior to the expiry of contract, open position of that contract would be taken out of spread definition and subjected to normal IM margin %. Position in such separated contracts would be shown separately. Limits would be reduced appropriately to ensure the IM% on near month contract. If limits are falling short to provide the same, the margin available in a group from which the near month contract was moved will also be utilised to make good the short fall. After moving the near month contract from the existing group to separate group, margin for the existing group will be re-calculated and limits would be reduced appropriately.

For example, you take buy position for 100 shares in Future – ACC- 27 Feb 2002 @ 150 and sell position for 100 shares in Future – ACC- 26 Mar 2002 @ 160. 100 buy position and 100 sell position would form spread. At 10% spread margin, margin blocked is Rs 1600/-. IM is 20%. Now position in Future – ACC- 27 Feb 2002 is taken out of spread. Following would be the margin requirement.

Limits

Rs 20000

Margin on Future – ACC- 27 Feb 2002 – Group A

100*150*20%

Rs3000.00

Remaining limits

(a-b)

Rs. 17000

Margin on Future – ACC- 26 Mar 2002 – Group B

100*160*20%

Rs 3200

Remaining limits

(c)-(d – 1600)

Rs 15400

 

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