The peak margin rule by SEBI had multiple conditions and one of those conditions was about delivery margin. This implies that when you sell shares from your demat account, 80% of the sold shares’ value gets credited to your trading account. The rest amount lays as the Delivery margin in Zerodha (if you open demat account with Zerodha).
So, in case you have been running across videos and blogs across the internet, then let us tell one thing first.
There is nothing to worry about, your money is completely safe and some part of it has been conditionally blocked, thanks to the SEBI’s peak margin rule.
Delivery Margin in Zerodha Meaning
Once you understand this concept, you would be able to know the whereabouts of your funds and how you can withdraw funds from Zerodha.
Let’s try to understand this with the help of an example.
For instance, you had the holding of 1 share of Gujarat Gas stock and now you would like to sell it for INR 660.70.
In that case, 80% of your equity trading account balance becomes available for you to either withdraw or use it for buying other stocks.
Here that 80% amount would be INR 528.56 and will be available for you to use in your trades.
The rest 20% i.e. INR 132.14 is kept as delivery margin in Zerodha and is blocked from use. This 20% delivery margin equivalent cash value gets available on the next trading day for you instead.
In case you are into Futures and Options trading, and there are positions open for physical delivery – in such a case, the additional margin will be blocked. This additional margin will be tagged within the delivery margin in Zerodha.
There are a few more conditions that you should ideally be aware of, for instance:
- On the expiry day, the margin blocked will be 40% of the contract value or the span and exposure margin (whichever is higher)
- for Long OTM options, 50% of the contract value worth will be blocked.
- for Long ITM options, no additional margin will be blocked.
Hopefully, you were able to understand the concept of Delivery margin in Zerodha across the trading segments. Nonetheless, in case you need any further assistance, we will be more than happy to call back and help you.
Just put in your basic details in the form below:
