What is a daily margin statement and how to make sense of it?
About the Daily margin statement:
As per exchange regulations, we send the daily margin statement to every client's registered email address. This daily margin statement is in the format prescribed by SEBI. The margin statement is sent with the intention of informing a client what his margin status is i.e what free margins are available in his account in order to take new positions without incurring penalty or charges.
If you have been trading on all exchanges, you'll receive a combined daily margin statement. A margin statement for a particular exchange will have all the segments included, that is if you trade on NSE EQ (equity) and NSE F&O - NSE CDS (equity & currency derivatives), both the segments will be included in daily margin statement.
The daily margin statement should be issued on the Trade day (T-Day).
Below is an example of how a daily margin statement looks -
Note - NSE through the circular no. INSP38154 prescribed a new margin statement format. We issue the daily margin statements in the new prescribed format. However, the statements downloaded from https://console.zerodha.com/reports/downloads will show the margin statements in the old format, for dates before 9th July 2018. Click here if you want to know how to interpret the old margin statement.
Understanding the Daily margin Statement:
To understand the daily margin statement, let us first look at its contents. Every broker must compulsorily disclose the following details in the margin statement -
- Client Code, Client Name & Exchange
- Trade Day
- Value of securities (after haircut)
- Bank Guarantees/FDR
- Total Margin Available
- Total Upfront Margins
- Total requirement
- Excess/Shortfall w.r.t requirement by exchange
- Additional Margin required by member as per RMS
- Margin Status (balance with member/due from client)
Funds - Shows the closing balance after reversing the effect of T-day credit & debit in the F&O and CDS segments. Similarly, closing balance in NSE EQ and BSE EQ segments is shown after reversing the effect of T-day and T-1 day credit & debit.
NSE EQ: Closing balance after reversing the effect of T day and T-1 day credit without margin
BSE EQ: Closing balance after reversing the effect of T day and T-1 day credit without margin
NSE FNO: Closing balance after reversing the effect of T day debit and credit without margin
NSE CDS: Closing balance after reversing the effect of T day debit and credit without margin
Note - Brokers are supposed to maintain separate ledgers for every segment. But as an industry norm, in the margin statement, all pay ins will be posted to the 'NSE EQ' segment, however, debits will be posted in the respective segment ledger and shown accordingly in the margin statement.
For ex- Assume you add 1 lac to your trading account. That day's margin statement will have Rs 1 lac posted under the Funds column in the NSE EQ row. Next day if you take a position in F&O for Rs 40000, in that day's margin statement, in the Funds column, the NSE EQ row will show 1 lac and the NSE F&O row will show -40000. The subtotal of the Funds column will show the net amount i.e 60000.
All obligations will be adjusted against the funds i.e if there is a credit obligation (profits) it will be added & if there is a debit obligation (loss, charges) it will be deducted from the funds column.
The negative values under the 'funds' column for the different 'segments' indicate funds utilized/used (out of the total money added to the trading account) for trades in that particular segment. This is basically the margin utilized for the various segments.
If the value under the 'funds' column for any of the 'segments' is positive it means that the net of all obligations is positive and you've made a profit equal to the amount displayed.
Value of Securities (after haircut) - margins received from pledging holdings if any i.e collateral margins.
Note - At Zerodha, we don't provide margins based on 'Bank guarantees/Fixed Deposit receipts' or 'any other approved form of margins'. So Total margins available will be the sum of Funds & Value of securities after haircut.
Total upfront margins - This includes the total SPAN + exposure margin + oprtion premium buy blocked for the positions you have taken if any.
F&O - Sum of SPAN Margin+Exposure Margin+Net buy premium
CDS - Sum of Initial Margin+Extreme Loss margin+Net buy premium
MTM - This column shows the sum of MTM losses if any.
Total requirement - shows the complete amount blocked by the exchange for your position, segment wise.
Excess/Shortfall w.r.t requirement by exchange - This column shows the value of 'Total margin available' minus the value of 'Total requirement'
Additional Margin required by member as per RMS - This column shows if any additional margins (Additional Surveillance Margin) is blocked in scenarios as mentioned in this Support article.
Margin Status (balance with member/ due from client) - This column shows you the total free balance that is available for taking new trades the next trading day (unencumbered balance).