Ive Jan31st 21500PE - 24400CE sell postions 8lots(200qtys) each. and the margin requirement is 4.17L. But in the funds section I’m expecting equal usage of margin from cash and non cash component which is 2.1L-2.1L. But i can see the noncash component is used to full(2.98) and the remaining 1.2L is used from cash component. Why is it so.
Hi @afsal_kh,
Could you let us know how are you deriving the cash and non cash components? It will help us investigate this further. Thanks.
If you see the image above… Ive 3L cash and 3L(2.98L) noncash component from pledged mutual fund. So whenever we enter a position, usually the required margin is allocated equally from both cash-noncash. But here it is unequally taken. In the above case, cash component is used only after allocating(exhausting) noncash component.
The problem here is suppose I’ve 1Lcash+3Lnoncash collateral. As per 50-50 cash-non cash rule. maximum margin allowed should be 2L(1cash+1non cash).
Here with above allocation the rule is violated.
Hi @afsal_kh,
Please note that we allow 100% usage of collateral without the need to maintain 50:50 cash collateral ratio to increase the trading power of the user. That’s why collateral is exhausted first and then, cash.
In your case, in traditional 50:50 cash collateral ratio, you could only take trades worth 2L but due to the facility to use 100% collateral, you can now take trades upto 4L. Hope this clarifies the doubt.
For more details, read the FAQs related to pledging here - Margin Pledge Policy and FAQs - Upstox Help Center