SAMCO Margin Policies and Limits

Margin Limits and Policies are a very critical point for consideration for every Trader and Investor in the markets. We at SAMCO in this post have tried to detail the margin policies that shall be available under different product categories. We have tried to be transparent and upfront in our risk management approach however Mr. Markets may require us to change our policies based on its mood swings.

Broadly, the entire risk management policy is designed for 3 types of trading patterns and segments

  • Equities
  • Derivatives – Futures
  • Derivatives – Options
Margin Policies Overview

Margin Policies Overview

1. Trading in Equities i.e. Shares Listed on NSE/BSE

All market participants can trade in the Equities or Cash Market Segment on the NSE/BSE using the following Product Types with SAMCO

Equity Trades - Overview

a. For Intra-day Trades

Intraday trades can trade using 2 product types

i. MIS – (Margin Intraday Square-off)

In this MIS product type, additional leverage is available for intraday trades since there is lower risk to positions especially since positions are not carried forward and therefore there is no overnight market risk. Clients will be required to chose MIS as a product type while placing their orders in the SAMCO Trader. By selecting MIS as a product type, leverage from 3x – 15x will be available depending on the liquidity of the stock. A total of 400+ stocks are available for trading in the MIS product type. However, one thing to remember is that all orders in the MIS product type should be compulsorily squared off before 3.14 pm failing to do which will require the SAMCO RMS to square-off positions at 3.15 pm.

To see the full list of eligible stocks and their corresponding multipliers, check the SAMCO Margin Calculator on our website.

ii. CO – (Cover Orders)

For traders requiring even more intraday leverage than provided by the MIS product, a unique feature available with the SAMCO Trader is Cover Orders. When you select the Cover Orders as a product, you will be compulsorily required to enter a stop loss for your trade. In simple terms, a cover order is a order with a stop loss. This enables us to calculate the maximum risk to your positions and accordingly charge lower margins for intraday trades. More often than not, the margin levied in cover orders shall be [(Trade Price – Stop Loss Price) * Quantity]. A point to remember is that these orders too will be required to be squared up before 3.15 pm failing which they will be squared up by the SAMCO RMS Team.

b. Delivery Trades

To execute delivery trades with SAMCO, you will need to use the product type – CNC i.e. Cash and Carry. As the name suggests, you will need to completely pay up the margin for delivery trades upfront prior to executing a trade. In case you have Rs. 50,000 in your account, you will be able to buy delivery of only Rs. 50,000 by using the CNC product type. Also, whilst selling in the CNC product type, you will be required to have the stock either in your SAMCO DP account or the SAMCO Client Beneficiary Account. You will not be permitted to sell stock which is not a part of the SAMCO ecosystem. This is to ensure stocks are sold only when stocks are available to be delivered to the exchanges as obligation.

Why do CNC trades require 100% Margin upfront? When stocks are purchased and carried forward, the price risk due to overnight events is extremely high. We have often seen stocks reacting to news events with 20% gap up/ gap down movements. In such cases, its best to have un-leveraged positions which require 100% margin.

An important point to note is that positions can be converted from MIS to CNC and vice versa at any point of time subject to margin availability. For instance, if you had purchased 1,000 shares of Reliance @ Rs. 900/share in MIS product and blocked Rs. 1,80,000 in margin (say 20%) and decided at 3 pm that you wanted to carry forward this as an CNC trade, all you’ll need to do is go to the SAMCO trader and convert your position from MIS to CNC. However, this conversion would be permitted only if you had Rs. 7,20,000 (CNC Margin difference of 80%) available in your account as free balance.

2. Trading in Derivatives – Futures (Equity Derivatives, Currency derivatives, Commodity derivatives and Interest Rate Futures Derivatives)

For trading in the futures contracts in the derivatives segment of the exchanges i.e. NSE-F&O, BSE-F&O, NSE-CDS, MCXSX-CDS and MCX, traders will be required to use the following product types with SAMCO

Futures Trades - Order Types

Futures Trades – Order Types

a. For Intra-day Trades

Intraday trades can trade using 2 product types

i. MIS – (Margin Intraday Square-off)

In this MIS product type, additional leverage is available for intraday trades since there is lower risk to positions especially since positions are not carried forward and therefore there is no overnight market risk. Clients will be required to chose MIS as a product type while placing their orders in the SAMCO Trader.

However, one thing to remember is that all orders in the MIS product type should be compulsorily squared off before cut-off time failing to do which will require the SAMCO RMS to square-off positions.

The stipulated cut-off time for the different exchange segments are as follows:

  • Equity Derivatives (NSE-F&O, BSE F&O) – 3.15 pm
  • Currency Derivatives (NSE-CDS, BSE-CDS, MCXSX-CDS) – 4.45 pm
  • Commodity Derivatives (MCX) – 30 Minutes prior to market close

The margin for MIS trades will be charged as a percentage of NRML Trades which shall be as follows

  • For Equity Index Futures (NIFTY, Bank Nifty and others) – 40% of NRML margin
  • For Equity Stock Futures – 50% of NRML Margin
  • For Currency Futures – 50% of NRML Margin
  • For Commodity Futures – 40% of NRML Margin

ii. CO – (Cover Orders)

For traders requiring even more intraday leverage than provided by the MIS product, a unique feature available with the SAMCO Trader is Cover Orders. When you select the Cover Orders as a product, you will be compulsorily required to enter a stop loss for your trade. In simple terms, a cover order is a order with a stop loss. This enables us to calculate the maximum risk to your positions and accordingly charge lower margins for intraday trades. More often than not, the margin levied in cover orders shall be [(Trade Price – Stop Loss Price) * Quantity].

The leverage available in a Cover order is higher than in MIS and NRML products.

Cover orders are available for all the segments i.e. equity, currency and commodity derivatives however the margin applicable varies across segments.

b. Carry Forward Trades

To execute carry forward trades with SAMCO i.e. trades that you’d like to carry overnight, you will need to use the product type – NRML i.e. Normal. As the name suggests, you will need to completely pay up the normal margin as required by the exchanges (SPAN + Exposure margin) for carry forward trades upfront prior to executing a trade. In case you have Rs. 50,000 in your account, and you want to execute a trade to buy 100 units of NIFTY Futures @ 8,500 and the applicable normal margin is 5%, then Rs. 42,500 (5% * 8,50,000) from your account will get blocked once your trade is executed.

When you execute a trade using NRML product type, you will be permitted to carry your positions till the expiry of the contract.

To calculate the margin applicable on your positions, you can visit the F&O Margin calculator on the SAMCO Website.

3. Trading in Derivatives – Options (Equity & Index Options and Currency Options)

For trading in the options contracts in the derivatives segment of the exchanges, traders will be required to use the following product types with SAMCO

Order Types for Option Trades

Order Types for Option Trades

a. For going Long options i.e. Purchasing Options

When you buy options, SAMCO provides no additional leverage. So if you are buying calls or puts of any contract, the premium required to buy them has to be available in your account with SAMCO. You can trade options either with product type as NRML or MIS, but since there is no additional leverage provided if you use product type as MIS, it is recommended to use the NRML product type which will allow you to carry the positions overnight and not MIS since all MIS positions would get squared off before the close of markets.

b. For going Short options i.e. Selling Options

Selling options requires margin to be blocked and the premium received from the short options is credited to your trading account.

You can short option either using the product type as NRML or MIS. To calculate the margin applicable on your positions, you can visit the F&O Margin calculator on the SAMCO Website.

The margin for MIS trades will be charged as a percentage of NRML Trades for short options which shall be as follows

  • For Equity Index Options (NIFTY, Bank Nifty and others) – 40% of NRML margin
  • For Equity Stock Options – 60% of NRML Margin
  • For Currency Options – 50% of NRML Margin

The margins displayed in the margin calculators are for information purposes only and are  only indicative in nature and do not constitute the final margin as would be levied by the exchanges. Clients should maintain some extra margins in their accounts to manage initial margins and marked to market losses, if any. SAMCO reserve the rights to square off all client positions in case of margin shortfall and in case of an erosion of more than 80% of balance available due to mark to market losses without any prior notice. In case of more than 80% erosion of balance by way of mark to market losses due to price fluctuation, SAMCO also reserves the right to restrict additional exposure and can place the clients account in square off mode only.

We hope this post clearly solves all your questions on SAMCO’s margin policies.

In case you still have any questions, you can call us at +91 – 22 – 2222 7777.

16 comments

Leave Comment
  1. DILIP WADHWANI

    LETME KNOW RATE OF BROKERAGE DELIVERY & INTRADAY & PLEASE STATE WHETHER YOU ARE GIVING RESEARCH CALLS FORLONG TERM ?

  2. BASANT KUMAR NAYAK

    Please present a detailed explanation of placing spread order in futures trading with example

  3. MAYUR RAJESH GADHIA

    Respected Sir,

    I have recently started Intra-Day Trading in Equities (using SAMCO Trader). I just wish to know how to square off the position (manually) before 3.15 PM.

    I don’t know the procedure to square off the position (manually), failing which, my positions get automatically squared off at 3.15 PM.

    Can you please elaborate the detailed procedure? It will be a great help.

    Thanking you in anticipation

    • Jimeet Modi
      Author

      Dear Mayur,

      To square-off your positions manually, go to your net positions (F11 window on the SAMCO Trader) and simply click the square off button on the bottom right corner of the window.

      In case you need any further help, kindly raise a ticket on http://www.samco.in/support in the technical support department and our executive shall guide you through the same.

  4. Ramesh Sinha

    Dear Sir ji,
    Please think of cash plus like facility for positional Nifty Future. Nifty is less volatile, hardly move gap up or down over 2-3%, so current 8% margin is on higher side. At least, you can give 3x leverage for Nifty BTST/STBT(only next day position less risk) positional trades, using NRML.
    Best Regards.

  5. Gagandeep Singh

    Hi team ,

    Wud like to know more about leverage you are offering … I mean it is fixed for every client or is depends on client to client ….. if it is fixed then how much it is …. & if it not fixed den how can I gt to know abt leverage will I gt if I open an account vid you …. for both nse & mcx

    Regards
    Gagandeep Singh

  6. Gagandeep Singh

    Hi jimeet ,

    I really appreciate quick reply from u …. well thanks for d link … but still i hve an doubt that when i called you… represent told me dat u r offering 33x in equity & upto 60x to 80x … where as in given link it is merely 4x exposure. . .huge difference isn’t it ?

    Regards
    Gagandeep Singh

    • Jimeet Modi
      Author

      Dear Gagandeep,

      The 33x for Equity and 80x for Derivatives is for Intraday Leverage. Leverage for delivery trades is at 4x.

      Simply
      Equity Intraday – 33x
      Equity Delivery – 4x
      Equity Futures Intraday – 80x
      Commodity Futures Intraday – 60x
      Currency Derivatives Intraday – 100x

      There is no overnight leverage possible in any of the derivatives segment due to the current penal margin shortfall regulations applicable. Refer – http://www.sebi.gov.in/cms/sebi_data/attachdocs/1312975056472.pdf

  7. Asish Dutta

    I have recently started Intra-Day Trading in Equities (using SAMCO Trader) in mobile android app of SAMCO. I just wish to know how to square off the position (manually) before 3.15 PM.
    I don’t know the procedure to square off the position (manually), failing which, my positions get automatically squared off at 3.15 PM.I generaly use the mobile App so plese say me the mobile app procedure

    • Jimeet Modi
      Author

      Hi Asish,

      You can square off your positions from the Mobile App before 3:15 PM.

      Go to the Position Book -> Settings Menu -> Select Square Off Option.

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