A lot of people are now moving towards what traders are trying to do in US, UK and other developed nation – Algorithmic and Quantitative Trading.

So I thought let me write a quick post and tell you what it is.

Algorithmic trading is basically done by machines. You must be thinking – wow machines who do not have any emotions of greed and fear – wow they will make a lot of money trading on formulas.

I have made formulas in bold. WHY? Because this is the most important part of Algorithmic Trading.

Who will write the formula? And what formula – what exactly is the strategy?

This is where Algorithmic and Quantitative Trading fails. On top of that paying a monthly fees to trade will reduce the profits. And what if your account takes a BIG LOSS? Will you blame the machines or yourself?

Read these huge Algorithmic and Quantitative Trading failures:

High-frequency trading and the $440m mistake

How one bad algorithm cost traders $440m

Interactive Brokers fined $4.5 million for algo trading system failures

Concerns over risk in Algorithm trading

And this in our own country:

Sebi sends NSE final show cause notice in algo-trading case

So my request is do not try something that has not be proven yet to be successful in the long run. If something goes wrong it can cost a lot of money.

I am telling this since years:

DO NOT LOOK FOR HOME RUN EVERYTIME YOU TRADE – JUST HEDGE YOUR TRADES AND LOOK FOR SMALL PROFITS CONSISTENTLY.

If you can succeed in taking small profits home consistently you can grow your trading account big in months and years to come. Think 3-5 years from now – not today, tomorrow or this month.

The motto of my Nifty and Bank Nifty courses are the same – learn to hedge and take small profits home. Do not care for the noise that goes on in Internet, media, social media like Telegram, Whatsapp etc, Algo trading talks, business channels in TV etc.

All these are just noise.

Just think about this simple investment – invest in SBI and keep it for 5 years. What do you think will happen? One thing is certain you will make at least 10% a year or more. Is this Algorithmic Trading? NO – Is this any Technical Analysis – NO. Is this any Price Action – NO. Is this any Bollinger Band, Candle Stick Charts, Cup & Handle Pattern – NO NOTHING.

So What It Is? It is KISS – KEEP IT SIMPLE STUPID.

Yes my strategies are just that – invest in options – hedge it and when it is making money – exit. Simple. No extraordinary adjustments – price action – regular watching etc. But it does work because the logic is strong and it works.

You can enroll for the courses here.

Date: Wed, Jul 18, 2018

Nifty saw a resistance at 11000. Resistance at 11,000 is a Huge Psychological Resistance At Play in Nifty.

I hope you know that Nifty does not move depending on the derivatives markets – it is totally depended on the Nifty 50 stocks:
https://www.moneycontrol.com/markets/indian-indices/?ind_id=9
https://economictimes.indiatimes.com/indices/nifty_50_companies

On top of that not all stocks have the same weightage on Nifty. Some have more some less.

I am sure you may be surprised that currently some stocks are below their level when Nifty was at 10,500 a few days back. Today its at 11,000 still many Nifty 50 stocks and others too are below what they were when Nifty was at 10500.

These are some of the stocks that are down:

ICICI Bank, Canara Bank, SBI, VEDL, Tata Steel, Tata Motors, Titan, HPCL, IOC, PFC, REC, SAIL, PNB, BOB, Sun TV, Ashok Leyland, LIC etc.

And the case with mid-caps is even worse. 🙁

Investors who invested in mid-caps a few months back must be getting frustrated and may press the panic button (take a stop loss/sell). This will ensure some of the mid-caps will fall further.

So if you are planning to buy stocks now, do not buy mid-caps. Wait for a clear reversal, then buy.

Fact is these things will continue in stock markets. Buy and Hold for years is now a dead policy. Its better to book profits and reinvest in other good stocks.

Fact is only options that too non-directional trading can make a regular income, monthly income, yearly income. Even if Nifty goes from 11000 to 10000 and then again comes back to 11000 – people who know options non-directional strategies can make regular income.

Why? Because options can go from 10 to 100 in minutes and come back from 100 to 10 and expire worthless. If a good traders can understand the logic of options – means what to buy/sell and when and properly hedge it – they will ba able to make a monthly income.

Once you do my course you will realize what I am saying is true. On top of that there in no tension involved. It is a slow process of making a monthly income but it makes – month after month – year after year.

You cannot decide direction of a stock every-time you trade – so its better to be a non-directional trader and keep making profits whatever it is consistently.

You can enroll for my nifty and bank nifty courses here.

Losing money in stock market trading is common but when I come across heavy losers, I write in my blog.

Some examples are 3 crore loss, 2 crore loss, 40 lakh loss (must read) and now this 60 lakh loss. The total loss of these four traders equals 6 CRORE.

Read this WhatsApp chat:

Yes, I feel bad when someone says he/she lost money trading the stock markets. Well if you start a business without knowing the ins and outs of business you are sure to lose money. But then somewhere sense should prevail. You must stop trading and start researching.

Not investing in stock markets is also a big loss. A Fixed Deposit in a bank fetches a mere 5-6% annual return a year. If you bring inflation into account you are just making a 1% return a year. So it’s not a loss but neither any profit. Therefore investing in stock markets is important but you must know what you are doing – DO NOT INVEST BLINDLY just because someone said it on TV or someone gave you a tip.

You must be an investor come trader. This means you must first invest in stocks for the long term, then ask for collateral margin on the stocks you hold from your broker and then from that money trader options. If you are doing it well everything will make money – the investments, the trades etc. You will be very happy with what your investments are doing.

This is proper portfolio management. Try to make whatever cent you can make from the markets.

Be diversified, hedge, and trader with lower brokerages – save and make money BOTH are important.

I manage my portfolio in a very disciplined way. I follow the 25-25-25-25 rule to manage my financial portfolio and every 6 months I re-balance. This is very important to make sure all eggs are not in one basket.

I agree that saying is different than implementing, but you have to start somewhere. So if you are reading this article I suggest you open an xl sheet and write down your savings till now, and then see how you can diversify.

You must know the basics of everything – financial management, all investments opportunities in India – which is good which is bad – for example investing in ULIPs (Unit-Linked Insurance Plan) is bad, how to choose good mutual funds and stocks and how to invest in them, how to trade options and futures with a hedge.

If you follow just the basics of financial management I can assure you that you will NOT see losses in any financial year. The kind of losses you are seeing above was due to FINANCIAL MISMANAGEMENT.

There is no need to try to be the next Warren Buffett or Rakesh Jhunjhunwala – just make sure you DO NOT LOSE MONEY TRADING, MAKE AT LEAST 20% PER YEAR IN YOUR TRADING ACCOUNT AND NEVER TAKE A BAD FINANCIAL DECISION OR MAKE A BAD INVESTMENT.

If you can just manage your financials the way I have written above you will live a happy life.

And I hope you live a happy life managing your financials well.

Update: Tuesday, 05-Apr-2022:

After reading the above post a reader Mr Navneet Yadav sent me an email. Since it’s a piece of important information I am adding it to this article.

His question:

Dear Sir,

I SHORT SBI APRIL’22 520 CE AND BUY SBI APRIL’22 530 CE

Now:

1) If on the expiry day for some reason I do not square off both the trades then what will happen, and,
2) If there are no sellers and buyers on the expiry day of both the strikes then what will happen?

Thanks,
Navneet

My answer:

If both are Out of Money (OTM) – both the options expire worthless – nothing will happen.
Profit/loss is all yours.

If both are In The Money (ITM) – one sets off the other – so nothing happens and cash settlement is done.
Profit/loss is all yours.

But if SBI finishes between 520 AND 530 on the expiry day then – the buy option is Out of Money (OTM) and expires worthless, but the short call is In The Money (ITM).

How are positions settled which are In The Money (ITM) on expiry day in all stocks in India?

On expiry, various F&O contracts are settled in the following manner if they are In The Money (ITM) once the markets are closed for trading:

• Take Delivery (stocks are delivered to your Demat account) – Long Futures, Long In The Money (ITM) CALL and short In The Money (ITM) PUT
• Give Delivery (you are required to deliver the stocks to the exchange) – Short Futures, Short In The Money (ITM) CALL and Long In The Money (ITM) PUT
• Only In The Money (ITM) options will be physically settled, if the option expires Out of Money (OTM), they expire worthlessly and there won’t be any delivery obligation.

2) If there are no sellers and buyers on the expiry day of both the strikes then what will happen?

It’s not possible as your position is open, so one more position is also open.
If you both chose not to close the above will happen.

If you too have any questions you can email dilip@theoptioncourse.com or just write in the comment section below. I reply to each email/comment.

In the year 2007 a few people from a local stock brokering firm came to my house to explain about stock markets and I was done. I opened a demat account the next day with a lot of dreams. What happened after that you can read here. Now in 2018 the story has changed but it was after a lot of struggle.

In short I started with stock investing – failed, then intraday trading – failed, then moved to derivative trading – failed there too – lost 7 lakhs and stopped trading to learn trading. Its 2018 now I am totally deepened on trading and investing profits. I left my job in the year 2016 and pretty happy about it. I am also happy that my conservative option course is helping a lot of traders since 2015. Testimonials.

What My Experience Says About Stock Markets

First what is physical delivery of stocks in options & futures (derivative) trading?

All over the world, on the expiry day derivatives are either settled by cash or stocks. Until June 2018 in India all derivatives – options and futures were cash settled. Well no more – Securities and Exchange Board of India has introduced long awaited physical settlements of stocks from July 2018 in 46 stocks only (list below), but soon I assume all the 170+ stock F&O contracts will be physically settled. From July 2018, there will be physical settlement in equity derivatives (options and futures both).

Examples of physical settlement in equity derivatives:

Future Buy:

If you were long future (buy) and did not close the future trade before expiry you will have to take delivery of stocks means buy the stocks equal to the lot size on the settlement date which is T+2 day.

Does it matter if you made a loss or profit? No it does not matter – you did not close the future trade so take the delivery. If course if you made a profit you can buy then immediately sell the stock and book your profits and get your cash back.

Future Sell:

If you were short future (sell) and did not close the future trade before expiry you will have to give delivery of stocks means sell the stocks equal to the lot size on the settlement date which is T+2 day.

What happens if you do not own the stock (the stock is not there in your demat account)? It goes into auction and frankly this is THE WORST situation to be in. In an auction an investor NEVER gets the market price of the stock being auctioned. Once I shorted a stock intraday but did not close it went into auction. Note than in those days (2007-08) the system of stock trading were not that smart like to day (2018). So what happened? A stock for 560 (approx) was auctioned for 582 (approx) – 4% more and given to me. So I lost 4% more than what was my actual loss. Thankfully I traded in only a few stocks so the loss was bearable, however now-a-days lot size is HUGE. If your short futures goes into auction for non-delivery of shares, then we are talking about 40-50 thousand loss (approx) on top of your actual loss. So even if you made a profit you may have to suffer a loss.

Option Buy and In The Money:

Call option buy and In the Money and not closed before expiry, then you have to take delivery of the stock just as a future buy. This is very bad news for Option Buyers. They pay a small premium but can get dangerous if the option was not closed before expiry day.

Call option sell and In the Money and not closed before expiry, then you have to give delivery of the stock just as a future sell. If you are unable to deliver the stock (the stock is not there in your demat account) then you will have to buy from auction and give delivery. Worst case please read above to know.

You must be thinking why auction – why not buy and deliver from the cash market? The reason is simple. Physical Delivery of the stocks must be done in T+2 days. That means the last day to buy the shares from equity markets in cash without auction is the expiry day itself. In this case the equity comes in your account in T+2 days and then is delivered the same day. However on T+2 day you cannot do that – the only option is to get stocks from auction which means buy stocks at a higher price than prevailing market price.

Put option buy (long puts) and In the Money is same as short futures. You have to give delivery of stocks.
Put option sell (short puts) and In the Money is same as long futures. You have to take delivery of stocks.

To Summarize What Happens In Physical Delivery Of Stocks In Derivative Trading:

You have to take physical delivery of stocks in these trades if not closed before expiry on T+2 day:
Long Futures, Long Calls, Short Puts

You have to give physical delivery of stocks in these trades if not closed before expiry on T+2 day:
Short Futures, Long Puts, Short Calls

Will all not-closed futures and options trades will be affected?

No these derivative trades will be affected:

All Futures whether buy/sell but not closed before expiry, and
All IN THE MONEY (ITM) Options whether sold/bought but not closed before expiry.

Here is the list of 46 stocks in which Physical Delivery Of Stocks In Derivative Trading will come into effect from the month of July 2018:

Please note that stock ONE lot size in terms of money is anywhere from Rs. 7 lakh to 10 lakh. So be very careful while trading options and futures in these stocks henceforth. If you trade make sure you close your trades before the expiry day even if your options may expire worthless. You should also hedge your trades so that even if you take/give delivery of the stocks the loss is going to be very small:

1 ADANIPOWER ADANI POWER LIMITED

2 AJANTPHARM AJANTA PHARMA LIMITED

3 ALBK ALLAHABAD BANK

4 ANDHRABANK ANDHRA BANK

5 BALRAMCHIN BALRAMPUR CHINI MILLS LIMITED

6 BEML BEML LIMITED

7 BERGEPAINT BERGER PAINTS (I) LIMITED

8 CANFINHOME CAN FIN HOMES LIMITED

9 CGPOWER CG POWER AND INDUSTRIAL SOLUTIONS LIMITED

10 CHENNPETRO CHENNAI PETROLEUM CORPORATION LIMITED

11 DCBBANK DCB BANK LIMITED

12 GODFRYPHLP GODFREY PHILLIPS INDIA LIMITED

13 GODREJIND GODREJ INDUSTRIES LIMITED

14 GRANULES GRANULES INDIA LIMITED

15 GSFC GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED

16 HEXAWARE HEXAWARE TECHNOLOGIES LIMITED

17 HCC HINDUSTAN CONSTRUCTION COMPANY LIMITED

18 IDBI IDBI BANK LIMITED

19 IFCI IFCI LIMITED

20 JPASSOCIAT JAIPRAKASH ASSOCIATES LIMITED

21 JUSTDIAL JUST DIAL LIMITED

22 KSCL KAVERI SEED COMPANY LIMITED

23 KPIT KPIT TECHNOLOGIES LIMITED

24 MGL MAHANAGAR GAS LIMITED

25 MRPL MANGALORE REFINERY AND PETROCHEMICALS LIMITED

26 NHPC NHPC LIMITED

27 NIITTECH NIIT TECHNOLOGIES LIMITED

28 OIL OIL INDIA LIMITED

29 OFSS ORACLE FINANCIAL SERVICES SOFTWARE LIMITED

30 ORIENTBANK ORIENTAL BANK OF COMMERCE

31 PTC PTC INDIA LIMITED

32 PVR PVR LIMITED

33 RCOM RELIANCE COMMUNICATIONS LIMITED

34 RNAVAL RELIANCE NAVAL AND ENGINEERING LIMITED

35 RPOWER RELIANCE POWER LIMITED

36 REPCOHOME REPCO HOME FINANCE LIMITED

37 SIEMENS SIEMENS LIMITED

38 SREINFRA SREI INFRASTRUCTURE FINANCE LIMITED

39 SRF SRF LIMITED

40 SYNDIBANK SYNDICATE BANK

41 RAMCOCEM THE RAMCO CEMENTS LIMITED

42 TORNTPOWER TORRENT POWER LIMITED

43 TV18BRDCST TV18 BROADCAST LIMITED

44 UBL UNITED BREWERIES LIMITED

45 VGUARD V-GUARD INDUSTRIES LIMITED

46 WOCKPHARMA WOCKHARDT LIMITED

If you are trading in any of the above stock derivative then please close your position at least 2 days before expiry else your RM or your broker will close it any-day without informing you.

And they have the right to do so? Why? Because if you default to buy the stock or give that many stocks as physical delivery the your broker will be at HUGE RISK — he/she will have to pay from their own pocket.

Obviously they will not take a risk and close your trade. Note that you are their not the only customer – that they can try to take risk. But they have many – so they will just close and not take the risk.

Why 2-3 days before? Because they will come into action to save risk of default 2-3 days before expiry.

Is there anything else you can do? Yes Rollover your future and options, or just DO NOT trade the above stocks in F&O segment.

There is a better way.

Just trade Nifty and Bank Nifty future and options. They are not stocks so will never have this physical settlement problem.

You need to know more than Delta, Gamma, Theta to be a good option trader. To be honest Delta, Gamma, Theta are just the theory on how options are made – they do not give direction of options. You can download a file here where I have explained in details about Delta, Gamma, Theta of options. But this is theory after this you need to learn strategies to make monthly income.

See this chat where this person is failing to make profits even after knowing about Delta, Gamma, Theta:

I keep getting calls from some option traders like Sir I am shorting an option with Delta 0.4 – will this make profits for me.

What is Option Delta?

It is the rate of change of the price of the option with respect to its security’s price. When the security’s price changes the delta of the options will also change – all the options whether near or far month – closer strikes or far off strikes.

For Calls the delta of an option ranges in value from 0 to 1. For Puts the delta of an option ranges in value from 0 to -1.

For every 1 point move in the underlying security – the delta of all its options will change.

Delta of far out-of-the-money options are close to 0 like 0.1 or 0.2, whereas near the money (ATM) have deltas like 0.4 or 0.5 and deep in the money (ITM) have deltas near to 1 like 0.8 or 0.9.

Most Important Point To Remember:

Option Delta varies from 0 to 1 but there is no guarantee or even an assurance that 0.4 or 0.5 or 0.6 or whatever Delta will go in the money or expire worthless.

It is better to research yourself to try out which option strikes works for you. Whether you are a buyer or a seller of options there is no point seeing what Delta an option has before proceeding to buy or sell it.

If there was some assurance that 0.6 Delta or 0.7 will go in the money or expire worthless then all traders would have done the same trade in that option strike – resulting in NO TRADE in that option. If everyone is a buyer or a seller in an option then the trade will not take place.

All this comes with research not reading theories which strikes are likely to expire worthless or likely to go in the money and trade then with hedge so that by chance something goes wrong you will not lose much.

My course will teach you which strike to buy and sell to make a monthly income peacefully.

You can enroll for the course here.

Hedging is an insurance of a trade which comes into action when the original trade starts losing money. Hedging is a great way to protect your capital when trading or your portfolio as a whole.

Do you know that HIIs (High-Net-Worth Individuals) and DIIs (Domestic Institutional Investors) & FIIs (Foreign Institutional Investors) always hedge their portfolio against any odds. It does not matter they pay a price for hedging but they know very well the importance and necessity of hedging. They have crores at stake they are not fools to trade derivative naked (without hedge).

Options are a great hedging tool. The Institutional Investors use it perfectly to keep their account protected.

Hedging makes sure the losses if any are small and negligible. Institutional Investors DO NOT trade intraday, they are positional traders so they always use hedging to ensure smooth growth of their portfolio.

Its unfortunate that retail traders pay price for DIIs and HIIs hedging. Retail traders trade blindly while DIIs and HIIs take their money away.

Let me give you a simple example of hedging to help you understand how peaceful it can be.

Suppose you have a big portfolio of Nifty 50 stocks. More than 5 lakhs and they are in good profit but you do not want to sell. In that case how do you protected your profits? You can buy puts to protect a huge fall in Nifty. If your stocks fall, its obvious that the stocks in your portfolio will also fall. But since you have bought hedging you do not have to bother much. The put you bought will make you some money. But by chance Nifty does not fall the put will expire worthless. I hope you can understand that hedging comes into action only when your hard earned money is in threat of going away. Otherwise they keep quite.

But as in above example if stocks fall the person who has bought puts will make some money out of it and his loss will not be as big as someone else loss who did not hedge.

This is just a small example of how hedging can help you survive the volatility of the markets. Hedging is a must for positional traders. Without hedge you will not be able to save your capital if anything goes wrong in your trades. 2 or 3 big losses may wipe out your capital.

Therefore in the ever uncertain markets it is very important to learn hedging. You can do my Nifty option course to learn how to hedge properly options, futures and equities to make a monthly income.

A lot of traders who call me to inquire about my course ask me this question after I tell them about the course – “I want to become a full time trader, I want to make trading my profession – is it possible?”.

Well the answer is yes, but there are certain criteria.

1. What experience you have in trading? 5 years or more is good.

2. Are you trading on tips or advisory service? If the answer is yes you will never become a full time trader. Tips/advisory service do not work and will never work in stock markets.

3. What knowledge you have in trading? Please note that this includes all – equity, options and futures. The mainstream trading. If you only invest in equities you can not become a full time trader because equities take time to make money. With derivatives you can make a monthly income, with equities you cannot. However it is very important to invest in stocks for long term as well.

4. Have you made profit trading at least over 10% a year consistently since the last 3 years? If the answer is no you cannot become a full time trader as of now.

5. How much money you have to trade? This I will explain later but with 1 lakh or 2 lakh you cannot become a full time trader.

Now lets get deep into this topic – what is the ideal time to become a full time trader.

Within days of opening a demat account, a trader starts dreaming of becoming a full time trader. Obviously its great to work from home but it isn’t that easy. You must be having some qualities to be a full time trader.

If you look at point 1 I have said that you must have some experience. Just because you have a trading account, you have bought a few options, done some future trade does not mean you can become a full time trader. To know something is very different than being an expert on something.

Assuming you have 10 years of experience but still trading on speculations or tips, you are still not experienced. An experienced person is someone who has the caliber to decide a trade and properly hedge it to insure it from risk. Even after the hedge he has a plan to execute and his success rate it above 60%. This kind of person is called an experienced person. He can have just 3 years of experience in trading but if he has the above qualities he can be a full time trader.

Note: My courses – Nifty & Bank Nifty can teach you hedging strategies. If you are interested you can contact me.

Another important part is risk management. In my experience I have seen that not many traders have any risk management capabilities. Even if you are a good trader you must have a sold risk management in place. Risk management is not limited to trading account only – I am telling about 100% financial risk management. This is a very complex topic, in fact I can write a book on it, but as of now all I am saying is you must have sold money management skills.

Some of the money management skills include:

Note: From 2nd July 2018 onwards, SEBI has made it mandatory for both SPAN and exposure margin to be blocked in order to take and carry forward an overnight position. If it isn’t, margin penalty will be applicable. Click here for the circular from NSE.

Your broker will now block both Span & Exposure margin. In some parts of India some brokers used to block only Span margin, so this rule was made. Now every derivative trader is on the same platform – earlier some traders had an advantage of paying less and making more but losing the same. Now they will also have to pay the same money (margin block) to trade futures and sell options.

But according to the new rule if your account is going in the red (loss a.k.a MTM (Mark To Margin)) then at end of day your broker will block more money to make sure FULL Span & Exposure margin is blocked again for the position to continue overnight. But if your account does not have the money then you may have to pay a margin short penalty, and the risk management team may close the trade without informing you.

Whatever new rules are being made they are forcing retail traders to either hedge their positions in derivative trading (which DIIs and HIIs always do) or stay out of the stock markets. Hedging is getting more important than ever. First lot size increase, then full SPAN and Exposure margin and then from Oct, 18 trading allowed from 9.15 to 11.55 pm. Without hedging you will not be able to survive in the markets for long.

Margin Short Penalty Explained 2018

As per SEBI regulations, margin shortage penalty is levied on overnight positions held in the trading account without sufficient margin. Please note that both SPAN and Exposure margin will be taken into consideration. Earlier only SPAN margin was taken into consideration for margin short penalty, but from July 2018 onward, both SPAN and Exposure margin will be taken into consideration.

Note that For intraday positions (day trading) shortfall margin penalty is not levied. It is levied on Equity Derivatives, Currency Derivatives, and Commodity derivatives segments. (For currency derivatives both the SPAN and exposure margins have to be maintained, if not margin penalties will be applicable).

Both SPAN & Exposure margin will be blocked.

Let say you buy a future and your broker blocks SPAN & Exposure margin of 60,000.

Assuming its a NRML (overnight carry forward position) and by 3.15 pm your MTM is 3000. Now the system will check if your account has 3000 or not. Let say your account has 3000 – then fine – I think that money will also be blocked. What they are trying is that both SPAN & Exposure margin should be there in your account else you pay a fine.

Suppose there is a shortage of 3000 by the end of day, then either your RMS will close the trade or you have to pay a penalty.

But in some cases it gets difficult for the RMS to close the position as there may not be any liquidity – in that case you will have to pay a penalty.

Here is the margin short penalty:

For less than 1 Lakh margin Or less that 10% of applicable margin short per day, penalty charge of 0.5% on the short money per day.

For example your MTM is 5000 you will be charged 0.5% of 5000 that day which is Rs.25/-

Next day if you make a profit it does not matter – you will still pay the margin short penalty.

For margin short equals to Rs 1 lakh or more Or equals to 10% of applicable margin, penalty charge of 1.0% on the short money per day.

So What You Should Do?

Make sure you have extra money in your account so that you never pay a penalty. Keep at least Rs. 20,000 extra. And make sure your MTM never exceeds 50% of it – that is 10000. This will ensure you never pay a penalty and your broker does not close your tarde without informing you.

Or, hedge your trades so that MTM is ever is very small. Hedging is better because the trade NEVER sees a big loss ever. Hedge ensures the losses or MTM if at all are small. Since the whole account MTM will be taken into account the MTM money can be reduced to 5k for small accounts.

The Best way to keep your MTM (Mark To Margin) low in your trading account is to do hedging. If you hedge your position you may never see an MTM (Mark To Margin) over 5000 and you will escape the margin short penalty by just keeping 5000 extra in your account. This is huge money saved. You can learn hedging strategies in my course. For more information you can contact me.

Hedging also ensures you can sleep peacefully in the night without worrying what will happen to your account the next day when markets opens.

My course teaches proper hedging in options, futures and equities. Moving forward it is very difficult to survive in this market without hedging your trades. Call is yours.

You can do my course and learn proper hedging strategies to make a monthly income. Stop taking losses now.

Hope that helps – to save this margin short penalty keep at least Rs. 20,000 extra in you account and DO IT TODAY.

I am trying to save your money and do not want you to pay a margin short penalty.