Future Margin settlment for nifty.

[john2084]

I am new to the future trading. If I buy one lot of nifty future, how the daily m2m settlement is done?


Suppose I buy one nifty lot @ 30000 initial margin.The daily mark2market loss is debited from the initial margin or I have to give daily fresh funds?

considering If i take a position on first day and the same day nifty moves 50 points against me. So next day m2m I have to pay 2500 fresh from my bank account or it will be debited for my initial margin account of 30000?

PLZ help me?

 

[john2084]

hey plz help me?

 

[SavantGarde]

I am new to the future trading. If I buy one lot of nifty future, how the daily m2m settlement is done?


Suppose I buy one nifty lot @ 30000 initial margin.The daily mark2market loss is debited from the initial margin or I have to give daily fresh funds?

considering If i take a position on first day and the same day nifty moves 50 points against me. So next day m2m I have to pay 2500 fresh from my bank account or it will be debited for my initial margin account of 30000?

PLZ help me?

If the Total Margin which includes, Initial Margin+Exposure Margin is 24,000 with 30,000 then you the excess of 6,000 beyond the requirement of Total Margin would be utilised for MTM, but it is always advisable to leave some extra money in your account towards MTM incase the position moves against you....!!!

Now as far as Money Management is considered one should not be trading NF with 30,000 ....at best one should have atleast 1.25 to be trading NF on positional basis.....!!!

SG

 

[john2084]

Thank you for the reply.

For placing the order(nifty future) with my broker I have to take a hold of around 27000(initial margin) from my account. I am just asking that if the nifty future moves against my position the amount will be debited from this initial margin or I have to pay additional amount fresh from my saving accou

 

[SavantGarde]

Thank you for the reply.

For placing the order(nifty future) with my broker I have to take a hold of around 27000(initial margin) from my account. I am just asking that if the nifty future moves against my position the amount will be debited from this initial margin or I have to pay additional amount fresh from my saving accou

Total Margin requirement is to obtain a position but MTM is separate....like I said earlier it is futile talking about all this ...and Traders are not encouraged to take NF position with 30, 40 or 50k in their accounts....nothing less than 1.25 for 1 lot of NF for positional trading....suggest learn or study some Money Management and Position Sizing before you jump into trades...!!!

SG

 

[midas touch]

If the Total Margin which includes, Initial Margin+Exposure Margin is 24,000 with 30,000 then you the excess of 6,000 beyond the requirement of Total Margin would be utilised for MTM, but it is always advisable to leave some extra money in your account towards MTM incase the position moves against you....!!!

Now as far as Money Management is considered one should not be trading NF with 30,000 ....at best one should have atleast 1.25 to be trading NF on positional basis.....!!!

SG

I'd like to get clear my above doubt in red.Please someone answer if Savant Sir is busy.
Hard time understanding MM n position sizing for NF.

thanks

 

[dineshN]

I'd like to get clear my above doubt in red.Please someone answer if Savant Sir is busy.
Hard time understanding MM n position sizing for NF.

thanks

Margin & MTM are separate things. Margin requirement is to allow you to buy/sell NF only. To cover the daily profits / losses some more funds should be in your account. This is MTM. In case of profit, you will receive MTM profit in your account and in case of Loss, your account will be debited. This is done on daily basis.
SG's point is, you should always have enough money extra in your account to manage your trade just in case it goes against you. Otherwise your broker will give you margin call. In trading business, if you get a margin call, you are doing something horribly wrong. Always trade with proper risk management. In the case of NF, you should have funds at least 1.25 times the margin requirement. Means 37500/- Rs in your account before you think of trading NF on positional basis.
Alternatively you could try MINIFTY that requires only 10000/- margin. So if you have 30000/-, trading 1 lot MINIFTY is better.