A margin penalty is a fee levied when there is an insufficient margin in a trading account. Exchanges mandate clients to maintain ample margins for their trades and to transfer funds in case of a margin shortfall, indicating a deficit of funds or margin in the trading account.<\/p>\n\n\n\n
What are the types of margin penalties on TradeJini?<\/strong><\/p>\n\n\n\n Upfront Margin Penalty<\/p>\n\n\n\n Upfront margin is the initial margin required to initiate a trade. If a trader doesn’t have enough margin in their account when entering a trade, then if the broker allows that trade to take place then the penalty will borne by the broker itself.<\/p>\n\n\n\n Example Scenario:<\/strong><\/p>\n\n\n\n If TradeJini allows a trader to enter a position with a minimum margin of \u20b91.1 lakh (SPAN + Exposure), but the trader only has \u20b91 lakh in their account, a \u20b910,000 shortfall will occur, resulting in a penalty on that amount.<\/p>\n\n\n\n Non-upfront Margin Penalty<\/strong><\/p>\n\n\n\n Non-upfront margin pertains to the margins that should be fulfilled by the client after initiating a trade, following the upfront margin requirement. Failure to provide the required funds within the deadline leads to a deficit and may result in a penalty.<\/p>\n\n\n\n Additional Information:<\/strong><\/p>\n\n\n\n For marked-to-market (MTM) losses in futures contracts, the client has time untill T+1 day to add the funds.<\/p>\n\n\n\n Ad-hoc margin requirements added by exchanges due to volatility or physical delivery margins to stock F&O contracts in the last week of expiry are also considered non-upfront margins.<\/p>\n\n\n\n