SEBI : New Margin System in wake of Coronavirus Pandemic

SEBI has issued guidelines for a new Margin framework which will be effective from Monday, 1st June 2020.

The new margining system encourages clients to set hedged positions since margins will be reduced on certain hedged positions and various option strategies. Margins will be slightly higher for certain naked Futures (Long or Short) and naked options writing. VAR Margin for Scrips has been changed in Equity Cash Market as well. Clients can remain safe or mitigate loss with the help of hedged positions.

Please monitor your positions carefully and add sufficient Margins to safeguard your positions against any Margin Shortfall.

The following illustrations are based on values taken from Wednesday, 20th May 2020 for 1 Lot :

The following illustrations are based on values taken from Wednesday, 20th May 2020 for 1 Lot :

Margin Impact on Naked Futures Long or Short Contract Specification View Settlement Price Existing Margin New Margin Change in Margin Requirement (approx) Nifty-Futures-28May2020-Short Bearish 9,066.65 1,24,217.00 1,41,840.23 Increase by Rs. 17,623 18.27% 20.86% Bank Nifty-Futures-28May2020-Long Bullish 17,836.65 76,307.48 85,334.66 Increase by Rs.9,027 21.39% 23.92% Nifty-Call-9100-21May2020-Short Bearish 9,066.55 1,05,082.63 1,24,958.83 Increase by Rs. 19,876 15.45% 18.38% Options Strategies Strategy Contract Specification View Existing Margin New Margin Change in Margin Requirement (approx) Short Strangle Nifty-OTM Call-10000-25June2020-Sell Bearish 1,36,387.01 1,08,692.23 20.31% Decrease Nifty-OTM Put-8000-25June2020-Sell Bullish Bear Put Spread Bank Nifty-ATM Put 17500-21May2020-Buy Bearish 32,902.49 7,468.08 77.30% Decrease Bank Nifty-OTM Put 17400-21May2020-Sell Bullish

In Hedged positions, the margin requirement is decreasing approximately by 49% in the case of Futures Buy and Put Buy Hedge (Protective Put) and by 12% in the case of Futures Buy and Call Sell Hedge (Covered Call).

With us trading Bank Nifty option strategies you are adequately protected as experience in the market along with the research capability counts. You can easily trade a lot with Rs 10,000 or maybe even with a lesser amount and can daily carry home 150-300 points gain which translates into a profit of up to Rs 3000-6000 every day.