yes. This has happened before. And the margin needed wasn’t that much. So on maturity day he can sell OTM that trades at 0.5 and still get a lot of profit. There was no limit on leverage.
But I don’t think it is possible now.
However, you may accrue a small interest on idle funds. Waiting for the mod’s reply. It would have been better if they had made it clearer. Otherwise you keep making assumptions that may not even be true.
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I believe the difference in margin i.e. the difference between the margin provided by the clearing house to the broker and the margin provided by the broker to the customer can be used by the broker to sell options etc…
What do you think is the way a completely zero broker broker survives?
Either float income or using margin as explained above.
I believe it is still happening…the difference in margins of different brokers should give you a clue…
Mods or @Ananth could you please clarify this…is it possible that brokers who claim haircuts over files provided by NSCCL or NSE can use those extra margins for FNO trades ?
This is because there are two types of haircut files. One is from a clearinghouse and the other is from an exchange. Use exchange EOD Var files (NSE) which have relatively less var % than NSCCL. In addition, there is a minimum haircut rate standard for liquidation corporation haircut.
NSCCLs: https://archives.nseindia.com/content/equities/APPSEC_COLLVAL_05042023.csv
EOD Var for NSE: https://www.nseindia.com/all-reports
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To clarify –
You said NSE EOD var file – var% is less than NSCCL. Haircut … Confused … Which is lower NSCCL or NSE (replacement)
This link you sent has both files… EOD nse var %…eod nse var files are .dat files and will not be opened by common software available.
Do you follow exchange haircuts (i.e. EOD % VAR) or NSCCL haircuts?
Can brokers charge clients for haircuts higher than those offered by NSE or NSCCL?
@Ananth Liquidbees’ redeemable haircut is currently 10% off. I don’t think a broker can go below what is stipulated by the exchange, zerodha currently imposes an 8% haircut on liquidbees he?
Yes they do. That’s why I wanted to know why my other broker is doing his 10% haircut.
Brokers can charge more than the haircut % stipulated by the exchange, but not less. Currently, liquidbees haircuts are 10% in exchange public files.
I don’t know who is right and who is wrong. If I get her 2% extra margin, obviously I stand by them, Zerodha offers his 92%. The last time I promised was yesterday.
I also wanted to know why they were charging extra. The broker then can’t he get a 92% margin?only 90 is passed to me. What about that 2 percent? The extra cash I keep with my broker generates some income.
Use the Exchange EOD Var File (NSE).
I said that the NSE var is relatively small. This means that very few scripts will have NSE variables higher than NSCCL. Clearinghouses have minimum haircut standards such as 10%, 20%, etc., but NSE Var files do not have such standards.
It should open in notepad.