Margin Amount

I Want To Know Margin Amount For All The Securities In Futures. Some One Answer This .thanks

Please Find The Attached File Of Margin

SavantGarde

Attached Files

Margin Requirement.xls (44.5 KB, 91 views)

thank u mr. savantgarde.
iam new to the derivative market. i have some doubt. so please explain.

in ur excel sheet it says approximately margin. whether the margin amount change day by day?. and some one told that whenever we make a contract after giving the margin money we have pay daily some money.
is it true. why we have to pay daily some money.

Ok Let Me Answer This As Simply As Possible.

1) Margins Change Daily & Also Through The Day Depending On The Volatility Of The Market. Exposure Margin Is Fixed By The Exchange & Remains The Same Through The Whole Month or Series

2) I Will Not Get Into Brokerage & Other Mandatory Taxes In Your Contract For Reason Of Keeping It Simple For Understanding

3) Now Let's Suppose You Have Bought 1 Lot Of Nifty Future @ 4700.00 & Your Required Total Margin For Your Purchase Rs.35000 & You Have A Ledger Credit Of Rs.50,000.00
Lot Size Being 50 For Nifty Future

4) Your Contract Will Show The Purchase Of Nifty Future
The Name Of The Scrip, Qty., Rate & Total.
Your Total Obligation Would Be 4700*50=235000+Brokerage & Taxes.

5) Your Client Summary Is Where You Have The True Picture Of Your Ledger & Most Important This Is Where It Will Show Your Opening Ledger Balance Rs.50000.00 Less Total Margin Requirement 35000.00 (For Your Purchase Of 1 Lot Of Nifty Future) & Your Net Available Balance Would Be Rs.15000.00

6) Now Let's Suppose It Closed On The Day Of Your Purchase @ 4750, 50 Points Above Your Purchase Price, Therefore The Rs.50*50=2500 Would Be Your Mark To Market Profit & Your Available or Opening Ledger Balance For The Following Day Will Be 17500.00

7) Now Let's Suppose It Closed @4650 Which Is 50 Below Your Purchase & In The Same Way The Amount Of 2500 Would Be Deducted & Your Ledger Balance Will Be Reduced By 2500 & The New Opening Balance Available For Following Day Would Be 12500

8) This Process Of Adding & Deducting Depending On The Close Of Nifty Future From Its Previous Days Close Is Called Mark To Market

9) If It Closes Higher Than Previous Close Then It Is Also Called Mark To Market Profit/Gain Vice Versa Mark To Maket Loss If It Closes Lower Than Previous Close Till You Sell The Nifty Future Which Would Mean Closing The Position To Nil.

10) If It Closes Lower Where Ledger Balance Cannot Take Care Of The Mark To Market Loss That Is When You Are Required To Give The Balance Amount To Continue Holding Your Position.


Basically In Short Mark To Market Is Gain or Loss From The Previous Days Close & Is Added or Deducted From Your Available Ledger Balance.

Regards

SavantGarde

Hi, SavantGarde

Very good explanation .Thanks Sir,

Raju

thank u mr. savantgarde.
your work is very appreciatble.keep it up.

In online trading accounts, the margining in software is really bad. There are lots of bugs. Or the software is extremely stupid not taking care of trading conditions.
Some examples :
Take the prev. example by SavantGarde, and, say you have a margin of 50k and 1 lot of Nifty Futures require 35k. If you are long with 1 contract, you cannot place an order for Stop & Reverse, meaning you cannot sell 2 contracts! You need to sell 1 contract and only after execution of the sell order you can place an order for selling the next contract!

Let us say, you place a stoploss sell order for selling 1 Nifty Futures contract (same conditions as above), then your margin is apportioned for the stoploss order, and, you cannot buy a contract now! The way it is, you have to place a buy order, and, only after it gets executed you can place a SL order!

Let us say, you have a margin of Rs.1 lakh, and, you place a sell order for 1 Nifty contract, and, is not executed yet. Now you buy 1 Nifty contract. You cannot buy one more contract as the sell order and bought position have consumed 70k, and, the balance 30k is not sufficient for buying one more contract. If you cancel the first sell order, and place a sell order again, then you can buy one contract, and, you will still have 30k margin left!

Everyone will understand that these are really absurd and stupid, but that is the way it is now!

These are just the samples, and, is really stupid. If the software is so terrible and cant calculate margins for just future contracts buy/sell, imagine the plight if you are hedging with options! For a simple example, You need double the margin for buying 1 Nifty Futures contract and selling 1 Nifty Call! These guys never understand!

These problems are there with Reliance Money, and, I do not know about others. So when you do your homework on margins & backtesting, plan sufficient margins accordingly, and, check with your broker or online brokerage about the margining system! You WILL be surprised they would not know and will get back to you shortly!

I download daily margins and other details of derivatives from sharekhan website... Here is the link.... http://www.sharekhan.com/Derivatives/ ... Download the derivative Infokit from here... ur questions will b answered

I don't face any such problems with kotak sec. They give you some headroom to mauver.

Good explantion.

I have one more doubt. Suppose, if you buy Nifty future on 20/3/2008 and squred it up on 24/3/2008, how the brokerage is calculated. Is there any intraday brokerage or delivery brokerage applies. At times, I find brokers calculate brokerage on daily basis while calculating the MTM. Can any one had some experince on this?

Thanks
Dhar