The Zerodha account balance is displayed as negative for the following reasons:
- Daily marked-to-market (M2M) losses: When you hold futures positions, Zerodha settles your losses for such positions on a daily basis. The system deducts the settlement amount from your available free cash balance, not from SPAN or Exposure margins, which may lead to a negative balance in your account if you do not maintain sufficient funds.
- Charges: Your account balance will be negative if you do not have sufficient funds in your account and Zerodha deducts Annual Maintenance charges, DP charges and other charges from your account.
- Utilisation of collateral margin: Your funds statement does not include the collateral margin you obtain by pledging securities. Therefore, if you utilise collateral margin to take positions, your funds statement may display a negative balance.
Example scenario
- You have an opening balance of ₹1,000 and collateral margin of ₹1,000 from stocks.
- You take a position that requires ₹2,000, and you utilise collateral margin for this position.
- Zerodha will block ₹2,000 from your funds statement at the end of the day, and your Zerodha account balance will become -₹1,000.
- Zerodha funds the shortfall of ₹1,000 through your collateral, and this will not result in any penalty.
Impact of negative balance
Your withdrawable balance on Console will also be negative. Zerodha will charge you a brokerage of ₹40 per executed order instead of ₹20 while you place an F&O order if your Zerodha account has a negative balance.
Zerodha will levy delayed payment charges of 0.05% per day (18% per annum) on your debit balance.