I saw margin penalty entries on my ledger. What is margin penalty and why have I been charged?
Margins are charged by the Exchange in the Equity & in the derivative (Equity Derivatives, Currency Derivatives & Commodity derivative) segments. Whenever you trade and carry forward a position on an overnight basis, you are required to maintain sufficient margins in your account. Margins are charged to cover for probable risk that arises out of price fluctuations. At Zerodha, we accept margins in the form of cash or collaterals (stock, mutual funds). Following are the margins levied by the Exchange in each of these segments:
|Equity||Equity derivatives||Currency derivatives||Commodity derivatives|
|VaR margin||SPAN margin||Initial margin||Initial margin|
|Extreme loss margin||Extreme loss margin||Extreme loss margin||Extreme loss margin|
|Additional margin||Physical delivery margin||Margin on crystallised obligation||Delivery margin|
|Margin on crystallised obligation||Additional margin|