23:35 Oct 25, 2014  

E-margin FAQs

What is e-margin? What are its benefits?

 

e-Margin is a leveraged trading facility. You can create positions under this product that  can be squared off or converted to delivery till  T+5 day (T= being Trade date) on or before the specified time. Unlike for a 'Cash' order, you do not have to pay the full order value for e-margin orders.

 

You can take positions with lesser margin amount with an option to carry the position till a maximum of T+5 days. In case you do not square off or convert the position to delivery, HDFC securities will square off the trade on T+5 day at any time after 2:30 pm. This is subjected to change / review by HDFC securities Ltd from time to time.

 

 

e-Margin is available only in equity segment not in F&O segment.

 

Example: You buy 100 shares of ABC @ Rs.2500 on Monday. You have an option to square off the position or convert to delivery till next Monday (i.e. 5 Trading days). If you fail to square off the position before 2:30 pm on T+5 day (Monday), your position will be squared off by HDFC securities. However, you will be liable to pay Mark to Market loss arising on open positions under E-Margin on daily basis.

 

What is the difference between E-Margin, Intraday and Cash?

 

Cash

Intraday

e-Margin

1.Require to hold funds equal to the full order value.

1.Margin required 30% - 60 % (depending on the scrip) of the order value.

1.Margin required 30% - 60 %* depending on the scrip.

2. Delivery based transaction, settled on T+2 day.

2.Same day Square off/convert to delivery transaction.

2.Transaction can be squared off /converted to delivery till  T+5.

 

3.Short Sell is allowed.

3.Short Sell is not allowed.

 

 

What are the timings for e-Margin trading?

 

e-Margin trading can be done between 9:15 am - 3:30 pm. However, you should square off the open position by 2:30 pm* on T+5 day.

 

Which stocks are eligible for e-Margin trading?

 

The list of Securities and Security Specific margin rates will be displayed on trading website   and may be subject to change / review by HDFC securities Ltd from time to time

 

 

What will be the impact on the margin blocked if I/ HDFC securities square off the e-margin position?

 

Margin will be released after deducting loss on square off  if any and this limit can be utilized for trading in other equity product.

 

What will be the impact on my limits if I convert an e-Margin trade into delivery?

 

You can convert an e-margin trade into delivery only if you have adequate cash limits. You can also mark hold on additional funds from your linked Savings account.

 

Example: You buy 100 shares of ABC at the rate of Rs. 2500 under E-Margin. Limit utilized is say Rs. 75,000 against total order value of Rs. 2,50,000.

 

If you decide to take the delivery of 100 shares, you will have to mark a hold on additional funds of Rs. 1,75,000 (Rs.2,50,000 - Rs. 75,000).

 

Can I partially convert my e-Margin positions to delivery?

 

Yes, you can partially convert your e-Margin position to delivery however, on T day, if you need to convert an E-margin trade to delivery, the quantity should to be equal to the executed quantity at trade level.

 

Example: You placed a buy order for 100 ABC shares. The order got executed in parts : 40, 30, 20, 10 shares with four trade reference numbers. Now, if you wish to convert this trade to delivery, you can do so based on the quantity in each trade reference number. Now If you try to convert 50 shares on 'T' to delivery, system would not allow you to do so.

 

From T+1 Day to T+5 Day, you can convert e-Margin Open Positions to delivery as per your requirement.

 

How do I convert my e-Margin position into Cash?

 

You can convert the 'e-Margin' position to delivery on 'T' day from Day's Trade book by selecting a trade reference and by clicking on Convert to Delivery option.

 

If you want to convert the 'e-Margin' position on 'T+1' to 'T+5' day,  you have to go to Open Position and click on Convert to Delivery (C2D) option and enter the quantity to be converted.

 

You can convert open positions to delivery only on FIFO basis. The funds payin for C2D action will happen as below But you can not sell the quantity converted to delivery.

 

I have sold some shares in Cash, Can I utilise the Credit For Sale for trading in e-Margin product?

 

 Yes, you can utilize sales proceeds against the sale for trading in E-Margin Product.

 

Can I short sell in e-Margin?

 

No, you can not short sell in E-Margin product.

 

What amount will be debited from my account at End of Day .

 

Margin amount and mark to market loss i.e difference between buy price and closing price will be debited at the end of each day.


How interest and brokerage will be charged to my account?

 

Interest will be charged @18 % on outstanding debit balance from the pay-in date for positions taken under e-Margin as below:-

 

Position taken 

Position squared off  

Brokerage to be charged  

No of days interest to be levied 

T day

T day

Equity Sq off

Nil

T + 1 day

Equity Delivery

1 Day + no of Holidays**

T + 2 day

Equity Delivery

2 Day + no of Holidays**

T + 3 day

Equity Delivery

3 Day  + no of Holidays**

T + 4 day

Equity Delivery

4 Day + no of Holidays **

T + 5 day

Equity Delivery

5 Day  + no of Holidays**

**Number of Holidays means Saturday, Sunday and trading/ settlement holidays if any.

 

Example 1:- Client has bought “A” stock in e-Margin Product on Wednesday and squared off the e-Margin position on Thursday. In this case interest will be levied for 3 days starting from Friday till Sunday.

 

Example 2:- Client has bought “A” stock in e-Margin on Wednesday and squared off the e-Margin position on Thursday In case Monday is trading holiday, interest will be levied for 4 days staring from Friday till Monday

 

On the sq off date if the position is taken in the same scrip, then on both the legs delivery brokerage will be charged.

 

No money will be pulled from the bank account (except margin) for open position until same has been squared off or converted into delivery, though client had Bank balance in his bank a/c

 

When will the realized profits / losses get credited / debited to/from my Savings account?

 

Your profits/losses get credited/debited to/from your linked savings account as per the below schedule.

 

How is the additional margin called during MTM process?

 

The additional margin is debited from the limits. It is the client's responsibility to check the adequacy of margins at all times and mark a hold on the required funds for increasing the limits in order to avoid Square off of the position/s by HDFC securities.

 

What happens if the limits are not sufficient to fund the additional margin requirement?

 

In case of insufficient limits, the available limits are checked and the additional margin requirement is recomputed.

 

Positions with short margin may get squared off by HDFC securities.

 

Can e-Margin position taken in one exchange be squared up in another exchange?

 

No, e-Margin position taken in one exchange has to be squared-off in the same exchange only.

 

I have taken a position on same scrip but on different days. Can I square off the second order first?

 

No. FIFO (First In First Out) method is followed for square off.

 

Example: Assume you have bought 100 shares of ABC on Monday and 40 shares of ABC on Tuesday. If you want to square off 110 shares, 100 shares bought on Monday will be squared off first after which 10 shares from the shares bought on Tuesday will be squared off

 

What happens in case of any short delivery from Exchange?

 

In case of any short payout is received from the exchange for any particular security and client has multiple open positions in the said scrip, then position will get closed for short quantity on FIFO basis.

 

*This is subjected to change / review by HDFC securities Ltd from time to time




 
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