ShareKhan - Weird Behavour with the Margin

michmert · #1 24th December 2007, 11:53 PM

Hello,

Can someone tell me why the following happens:

Say I have 70,000 In my account.

MONDAY:
I buy 1,300 Shares of X @ Rs. 100 a share, for which sharekhan gives 50% Margin, ie. use 65,000

Hence: Balance is now 5,000 Cr

TUESDAY:
NO Trades, Same Balance
Balance is still 5,000 Cr

WEDNESDAY:
Trading Session: No Trades, Same Balance
Evening: They Bill the whole money for the shares I bought, Hence the remaining 65000 is billed at this point

Balance is now 60,000 Dr (Ie. -60,000)

THURSDAY:

During The Trading Session:
AT 11 AM ON THURSDAY:
Suppose I want to sell a part of my holding in company X, say I sell 1,000 Shares (Assume same rate of 100 for the sake of simplicity)
Hence I sell shares worth 1,00,000

Balance at 11 AM After Selling: 40000 Cr

AT 1 PM ON THURSDAY:
Suppose I want to re-buy some of my holding In the same company X, Say I want to buy 300 Shares, again at Rs. 100

Now, if you notice, sharekhan will not give you 30% margin on those shares, it will deduce the full amount from your balance, so for 400 Shares at Rs. 100 a share, it deducts 40,000 from your account, and not 12,000. Means I can only re-buy a maximum of 400 Shares (400*100 = 40000) even though I have sold 1000.

Can someone explain to me why this happens? Why am I not allowed to buy using margin again?

sillu_m · #2 25th December 2007, 03:36 AM

Quote:

Originally Posted by michmert

Hello,

Can someone tell me why the following happens:

Say I have 70,000 In my account.

MONDAY:
I buy 1,300 Shares of X @ Rs. 100 a share, for which sharekhan gives 50% Margin, ie. use 65,000

Hence: Balance is now 5,000 Cr

TUESDAY:
NO Trades, Same Balance
Balance is still 5,000 Cr

WEDNESDAY:
Trading Session: No Trades, Same Balance
Evening: They Bill the whole money for the shares I bought, Hence the remaining 65000 is billed at this point

Balance is now 60,000 Dr (Ie. -60,000)

THURSDAY:

During The Trading Session:
AT 11 AM ON THURSDAY:
Suppose I want to sell a part of my holding in company X, say I sell 1,000 Shares (Assume same rate of 100 for the sake of simplicity)
Hence I sell shares worth 1,00,000

Balance at 11 AM After Selling: 40000 Cr

AT 1 PM ON THURSDAY:
Suppose I want to re-buy some of my holding In the same company X, Say I want to buy 300 Shares, again at Rs. 100

Now, if you notice, sharekhan will not give you 30% margin on those shares, it will deduce the full amount from your balance, so for 400 Shares at Rs. 100 a share, it deducts 40,000 from your account, and not 12,000. Means I can only re-buy a maximum of 400 Shares (400*100 = 40000) even though I have sold 1000.

Can someone explain to me why this happens? Why am I not allowed to buy using margin again?

Sometime i too face the same problem and i m also confused. Can somebody explain?

WildFire · #3 25th December 2007, 11:55 PM

Same with me too. I thought they only offer margin (means x4 in my case) only for the cash, but never really able to justify this after every single transaction. Now i hold 125% value worth of my capital and they didn't object it and my limit now shows negative. I was wondering that they might charge me higher commision or some kind of interest for those sell i guess, will update when i know more.

premchander · #4 26th December 2007, 05:10 PM

I think they are doing correct.If u buy share in margin you have to put the remaining money to sharekhan on T+2.if u sell the stock on third day they will get the money only after two days,Still that they don't allow u to use that money to do margin.