Why is full credit not being received against the sell value of the holdings?
Under SEBI's peak margin norms, when selling stocks from a demat account, only 80% of the sale value can be credited for subsequent trades on the same day in the same or different segments. The remaining 20% credit will be held in Kite's Delivery margin field until the next trading day. To learn more, see What does the "delivery margin" field on Zerodha Kite mean?
The significant changes applicable after upfront and peak margin norm implementation are as follows:
| Action | Before the implementation of the peak and upfront margin rules | Current process in place |
| Stocks sold from demat holdings | 100% of the proceeds can be used to buy other stocks or trade in F&O. | Only 80% of the proceeds can be used to buy stocks or trade in F&O. The balance 20% will be available for trade from the next trading day. |
| Stocks sold from T1 holdings (i.e. BTST) | 100% of the proceeds can be used to buy other stocks or trade in F&O. |
100% of the proceeds can be used to buy other stocks or trade in F&O from the
next day
onwards. To learn more, see
Why is the credit from selling T1 holdings unavailable for use on the same day?
|
| Intraday profits earned | Proceeds can be used to buy stocks or trade in F&O on the same day. | The earnings cannot be used until it is settled by the Exchanges, i.e., T+1 day. |
| Options sold | Proceeds can be used to buy stocks and trade in either currency or equity F&O on the same day. | Proceeds can be used only to buy options in the same segment, i.e., sell credit for stock options cannot be used to buy currency options. |
| Hedged Position | Any leg can be exited first without margin penalty, even if there is an intraday margin shortfall when the position with additional risk/margin isn’t carried overnight. | First, exit the higher risk/margin position if adequate margins are not available since margin requirements will be monitored intraday, and shortfalls may lead to a penalty. |
An NRI with a Non-PIS account can only use 60% of the sale proceeds for trading or investing on the selling day, and the remaining 40% will be released on the next trading day. To learn more, see What documents are required to open a Zerodha account as an NRI?
To learn more about peak margin norms, visit
zerodha.com/z-connect/zerodha/bulletin-latest-at-zerodha/peak-margin-intraday-leverages-2nd-order-effects-dec-1st-2020
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