Trading for Living -- Successfully Completed one year as Full Time Trader

[travi]

Increase in margins in case of expected volatility due to any event is understandable. But today I do not get the point of increasing it.

Its almost 40% increase in margins.

Am I missing something ?

I understand your point but its been like that since long, its their "so-called" Volatility predictor. Blackbox details are never revealed and that's fine.
The RMS is deployed by many around the world so all i meant was that its not only one broker doing it, some or the other method is followed by all.

Its not exactly a function of VIX so I can comment further, although huge margin changes are absurd to the end-user.

 

[amrutham]

How will broker manage the risk if one leg of the strategy is closed with other risky legs still open ?

In this case, trading platform should be intelligent enough not to allow exit of long positions before exiting corresponding shorts in the strategy.

 

[TraderGYO]

Indian retail community awaits the revolutionary spread order that thinkorswim brought to american markets in 2000s

 

[travi]

In this case, trading platform should be intelligent enough not to allow exit of long positions before exiting corresponding shorts in the strategy.

Indian retail community awaits the revolutionary spread order that thinkorswim brought to american markets in 2000s

On a lighter note, if anyone can do it, I bet Fyers can, probably needs a lot of funding to setup and test.
Overnight exponential clientele

 

[TraderGYO]

On a lighter note, if anyone can do it, I bet Fyers can, probably needs a lot of funding to setup and test.
Overnight exponential clientele

May be @Tejas Khoday can confirm it what I have understood is that the problem is simultaneous orders fillings. Thinkorswim had to tie up with a market maker who would fill the orders 1 tick above the theoretical price. In India I do not know if such tie ups are possible at this point. It's really frustrating to see my broken wing butterflies make money week after week but all in excel as I do not have the large margin amount to trade them. Wish the market regulators understood what it is like to trade in the actual Market.

 

[travi]

May be @Tejas Khoday can confirm it what I have understood is that the problem is simultaneous orders fillings. Thinkorswim had to tie up with a market maker who would fill the orders 1 tick above the theoretical price. In India I do not know if such tie ups are possible at this point. It's really frustrating to see my broken wing butterflies make money week after week but all in excel as I do not have the large margin amount to trade them. Wish the market regulators understood what it is like to trade in the actual Market.

That is Level 2

Even if the broker platform can write a simple wrapper over their current order window, and execute all trades at MKT rate and lock all legs the way CO/BO works,
where you canNOT square-off or cancel, only Exit works and take care of reduced Margins (say even down to 15-20% from current levels) the entire trading community will be happy.
This small step can work without Exchange or Regulator interfering in Broker's business.
Flipside is most Disc Brokers have Omnesys etc as their Operator over which their platform works, so they have to do a lot of brainstorming.

Ofc, if one trades a short straddle spread (then calls it hedged ) and expects significant lesser margin can go find a new exchange

 

[amrutham]

Took below NF trade for May expiry.

Buy NF 10700 PE 900 Qty @ 132
Sell NF 10600 PE 900 Qty @ 99

Sell NF 10400 PE 300 Qty @ 54

Net Debit = 13.5K

 

[Tejas Khoday]

On a lighter note, if anyone can do it, I bet Fyers can, probably needs a lot of funding to setup and test.
Overnight exponential clientele

Yes, we can since we have a much greater control over technology than most other brokers. But here are some issues:

1. The exchange collects margin from the broker despite offsetting trades.

2. As a broker, if we provide low margins as per offsetting trades, we are at a disadvantage because the exchange looks at it another way. The exchange charges penalties for margin shortfall.

3. So, each time such trades are entered, it will be a cost to us either in terms of penalties or in terms of margin financing and is not justifiable at ₹20/- per executed order for carry-forward trades.

Hope this clarifies.

 

[VJAY]

Margin blocked in Zerodha for this around 25 L where as it used to be around 18 L. Their calculator is still showing 18L.

I think the time has come to change the broker.

View attachment 24970

Dear amrutham,
Not jump /switch brokers for this one problem you faced in margin....most of brokers (discount) had problems same or other.....so research/get info about all aspects before switch....I know one friend who trades like you with big fund who trades with IIFL ...he told me long before that they only use span margin for writting options .though they need to know way of your trading ....better to contact any IIFL branch near you

 

[amrutham]

Dear amrutham,
Not jump /switch brokers for this one problem you faced in margin....most of brokers (discount) had problems same or other.....so research/get info about all aspects before switch....I know one friend who trades like you with big fund who trades with IIFL ...he told me long before that they only use span margin for writting options .though they need to know way of your trading ....better to contact any IIFL branch near you

Thanks VJAY.

At present our both trading accounts are with Zerodha only. We have investment account with ICICIDIRECT , but options trading with these many lots, they will kill you with the brokerage. We only use this account for single lot (stock options) trades.

In Zerodha ,some days we face problems while entering the trades. The orders are rejected with some strange messages. For example in Long butterfly, the first two legs go successfully and the third one gives issue. In this case we do not have any other option other than closing all the legs of the strategy. To be on safe side, we wanted to move one of the accounts to some other discount broker.

Regarding margin requirements, I believe its more or less same with all the brokers. I am okay with that. I am not expecting any margin reduction. The only thing is I do not like surprises without any reasoning.