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Understand Net Margin Used (Initial vs Final)

contactruchir
contactruchir in Python client
Currently I have variety of options positions (few are covered, hedged, open etc)
Now I am trying to add couple more options. While fetching margin, I'm unable to understand what will be my nett required margin if I execute that order.

Below are 2 margin snippets:
order 1: {'initial': {'type': '', 'tradingsymbol': '', 'exchange': '', 'span': 516815.25, 'exposure': 48271.35, 'option_premium': 0, 'additional': 0, 'bo': 0, 'cash': 0, 'var': 0, 'pnl': {'realised': 0, 'unrealised': 0}, 'leverage': 0, 'charges': {'transaction_tax': 0, 'transaction_tax_type': '', 'exchange_turnover_charge': 0, 'sebi_turnover_charge': 0, 'brokerage': 0, 'stamp_duty': 0, 'gst': {'igst': 0, 'cgst': 0, 'sgst': 0, 'total': 0}, 'total': 0}, 'total': 565086.6}, 'final': {'type': '', 'tradingsymbol': '', 'exchange': '', 'span': 516815.25, 'exposure': 48271.35, 'option_premium': -921071.25, 'additional': 0, 'bo': 0, 'cash': 0, 'var': 0, 'pnl': {'realised': 0, 'unrealised': 0}, 'leverage': 0, 'charges': {'transaction_tax': 0, 'transaction_tax_type': '', 'exchange_turnover_charge': 0, 'sebi_turnover_charge': 0, 'brokerage': 0, 'stamp_duty': 0, 'gst': {'igst': 0, 'cgst': 0, 'sgst': 0, 'total': 0}, 'total': 0}, 'total': -355984.65}}

order 2: {'initial': {'type': '', 'tradingsymbol': '', 'exchange': '', 'span': 0, 'exposure': 37660.049999999996, 'option_premium': 0, 'additional': 0, 'bo': 0, 'cash': 0, 'var': 0, 'pnl': {'realised': 0, 'unrealised': 0}, 'leverage': 0, 'charges': {'transaction_tax': 0, 'transaction_tax_type': '', 'exchange_turnover_charge': 0, 'sebi_turnover_charge': 0, 'brokerage': 0, 'stamp_duty': 0, 'gst': {'igst': 0, 'cgst': 0, 'sgst': 0, 'total': 0}, 'total': 0}, 'total': 37660.049999999996}, 'final': {'type': '', 'tradingsymbol': '', 'exchange': '', 'span': 0, 'exposure': 37660.049999999996, 'option_premium': -390506.25, 'additional': 0, 'bo': 0, 'cash': 0, 'var': 0, 'pnl': {'realised': 0, 'unrealised': 0}, 'leverage': 0, 'charges': {'transaction_tax': 0, 'transaction_tax_type': '', 'exchange_turnover_charge': 0, 'sebi_turnover_charge': 0, 'brokerage': 0, 'stamp_duty': 0, 'gst': {'igst': 0, 'cgst': 0, 'sgst': 0, 'total': 0}, 'total': 0}, 'total': -352846.2}}

I understand that negative margin means margin will be released if that order is executed.
So what will be my net margin for Order 1 & Order 2 ????

Order 1:
Initial Margin: 5,65,086.60/-
Final Margin: -3,55,984.65/-

Order 2:
Initial Margin: 37,660.05/-
Final Margin: -3,52,846.2/-
Tagged:
  • Nivas
    Nivas edited September 3
    Rather than checking the margin for each order separately, you can easily check the combined margins by including both orders in the basket order API as a single request. This approach will provide you with the net margin requirement details. Additionally, you might find it useful to read this article for more information on initial and final margins.
  • contactruchir
    contactruchir
    Thank you for the reply.
    I am checking combined margin of Buy & Sell.
    However I'm a bit confused as how to find out (calculate) the margin blocked & benefit in both orders !!!

    Example:
    In order 1, the combined (initial) margin of Buy & Sell is 565086.60/- however due to the hedged order the final margin is -355984.65/- which will release my blocked funds.
    Now what is the margin blocked for order 1 & what is the benefit of this basket order (as fund is released) ?

    My assumption is:
    * Margin blocked for order 1: 209101.95 (565086.50 - 355984.65)
    * Benefit of this basket order: 355984.65

    Please share your thoughts....
  • Nivas
    Nivas
    The difference between the initial/required margin and the final margin reflects the benefits of the spread. If the final margin (total_field) is positive, it represents the margin blocked for the basket orders post-execution. Conversely, if the final margin (total_field) is negative, it indicates the margin funds received from the executed basket orders. This occurs because the final margin is calculated as -355,984.65, which is the required margin minus the premium (565,086.6 - 921,071.25). For further details, please refer to the support article.

    Initial/required margin (total_field): The total margins needed to execute the orders.
    Final margin (total_field): The total margins accounting for the spread benefit.
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