FuturePlus

How is the additional margin required calculated in case of margin changes during the day?

Below is the additional margin calculation process:

Assume you take a buy position for the fresh market order of 1000 quantity at current market price of 100/- The initial margin percentage (IM%) for the scrip is 20% (IM%).

• Margin Blocked = [{Weighted average price of fresh order * Quantity * IM%}] = [(100*1000*20%)] = 20,000

Now suppose the initia margin percentage (IM%) for the scrip changes to 30%, basis change in margin requirement based on exchange file at any given point of time.

• Additional margin required = New margin on Re computation - Margin Blocked = [(100*1000*30%)]-20,000 = 10,000

In case of Sell position Assume you take a sell position for the fresh market order of 1000 quantity at current market price of 100/- The initial margin percentage (IM%) for the scrip is 15% (IM%).

• Margin Blocked = [{Weighted average price of fresh order * Quantity * IM%} = [(100*1000*15%)] = 15,000

Now suppose the initial margin percentage (IM%) for the scrip changes to 20%, basis change in margin requirement based on exchange file at any given point of time.

• Additional margin required = New margin on Recomputation - Margin Blocked = [(100*1000*20%)]-15000 5000