people explain me what is " m to m profit loss on open positions"
what exactly is that..i have incurred a loss today and i was not aware of this charge or tax..can you please explain on what basis is this charge put on..?
Hi Arun,
MtoM profit/loss is simply the total amount that either u r making or loosing at that particular point of time.
Eg: U bought ABC 10 shares @ Rs.100. Now the value say at 11AM is Rs101, so U will see MtoM as 10*(101-100)=10*1=10(Maybe in green color.)
Now lets say at 12PM the value is 95, so MtoM is[10*(100-95)=10*5=(-50)]= 50(in red color).
Now consider the scenario where u sell a delivery call, it will also gets reflected under MtoM but with the following twist.
Eg: U bought ABC 10 shares on 1stDec @ Rs.100. U sold 10 shares on 10thDec at say 2PM at 110. So as per our knowledge, MtoM should show us 10*(110-100)=100. Well NO. As i said MtoM is profit/loss at a particular point of time. U will understand this in example below.
Now lets say moment u sold at Rs.110, ABC fell to 105. In this case MtoM will show u 10*(110-105)=50(in green) as u have profitted tat much money by selling at right time. But if the value is say 120, then MtoM=[10*(110-120)=(-100)]=100(in red.) coz u have lost that much money as u hv sold ur shares early. MtoM in delivery is just to tease ur position.
Regarding other deductions like STT, stamp duty, etc, they are charged on the value of MtoM, either its ur profit of loss.
Hope i have cleared ur doubt abt MtoM.