Traders in trouble with 50 per cent cash margin
Stock brokers demanding 50% margin from clients MUMBAI: Many stock brokers have started demanding 50 per cent cash margin from traders trading in India's equity derivatives segment against the 50 per cent regulatory requirement. Traders say this has made it difficult for them to trade in the derivatives segment as the requirement of 50 per cent margin was sufficient to offset any volatility risk. Recently, SEBI has tightened the margin criteria to increase the margin requirement. Of course, the stock market is constantly reaching new heights and hence brokers have become more cautious. Experts say brokers have started imposing one-sided penalties on traders who do not have a 50 per cent cash margin for trading in the F&O segment. Penalty involves 5% annual interest due to lack of cash margin. "Retail participation in derivatives segment is growing rapidly," said an official of a Mumbai-based broking firm. We are pushing for a 20 per cent margin to keep retail trad...