What are the margin requirements?
INITIAL MARGIN Initial margin based on Value at Risk Model (VaR) to estimate worst loss that can happen for a time horizon 99% confidence level SPAN® is the system used for margin calculation. Volatility is one of the inputs to the SPAN calculationsEWMA/ J.P.Morgan Risk Metrics methodology for calculation of volatility will be adopted. Similar procedure is followed in most international exchanges like CBOT, CME, NYMEX, NYBOT, TOCOM, LME, LIFFE Minimum Initial Margin for each commodity traded by the Client. Mark- to- market Margin All open positions will be marked-to-market at the daily settlement price at the end of the day Client has to bring mark-to-market (MTM) margin to be through funds transfer the next day.
The margin requirements for stock purchases and short sales is 50%. This means that for stock purchases, you can borrow up to 50% of the total cost. For short sales, you must deposit an amount equal to 50% of the current market value of your short positions. If you are starting with $100,000, you can get up to $100,000 of additional loans, making your total buying power equal to $200,000, if you are trading marginable securities. If the stock is trading at less than $3.00 you may not use your loan balance to trade the stock. You can visit ‘Account Balances’ to see the amount of money you have on loan.
