How is the additional margin required calculated in case of margin changes during the day?
Below is the additional margin calculation process:
Assume you take a buy position for the fresh market order of 1000 quantity at current market price of 100/- The initial margin percentage (IM%) for the scrip is 20% (IM%).
Margin Blocked = [{Weighted average price of fresh order * Quantity * IM%}]
= [(100*1000*20%)]
= 20,000
Now suppose the initial margin percentage (IM%) for the scrip changes to 30%, basis change in margin requirement based on exchange file at any given point of time.
Additional margin required = New margin on Re computation - Margin Blocked
= [(100*1000*30%)]-20,000
= 10,000
In case of Sell position
Assume you take a sell position for the fresh market order of 1000 quantity at current market price of 100/- The initial margin percentage (IM%) for the scrip is 15% (IM%).
Margin Blocked = [{Weighted average price of fresh order * Quantity * IM%}
= [(100*1000*15%)]
= 15,000
Now suppose the initial margin percentage (IM%) for the scrip changes to 20%, basis change in margin requirement based on exchange file at any given point of time.
Additional margin required = New margin on Recomputation - Margin Blocked
= [(100*1000*20%)]-15000
5000
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