When comparing margin requirements for executing Bull Call or Bull Put strategies between Dhan and Zerodha, it has been observed that Dhan typically imposes a significantly higher margin requirement than Zerodha.
Hi @simranjit84
Please note that the exchange margin requirements are always Span + Exposure, and on Dhan we follow the same metric and that’s a mandate for all stock brokers.
The reason you are possibly seeing the difference when you compare with other brokers is because they might be or actually reducing the premium to be received from the upfront margin required and that shows a bit lesser value in the final margin. However this is a notional benefit shown to reduce upfront margin. Please note that this premium to be received, will be realised on T+1 day and the amount is credited in the ledger only, but not reduced from margin. So the next day, the margin used will be the same as the previous day and the premium difference will be credited in the client ledger itself.
Margins now are standardised across all stock broking platforms. It’s just a method few brokers possibly use to show a notional lower amount upfront. While you may feel the margin is different or lower than on Dhan, but this is what I am assuming is happening in their calculation v/s the one we show on Dhan. We are not sure why this is done, we show the actual margin required as per exchange specification and we wouldn’t be comfortable showing it any other way than what is prescribed by the exchanges.
Hope this clarifies.
As layman.
It means what i can buy in Zerodha with 3 lots
but in Dhan with same amount i can buy 2 lots
It’s just the same standard that is defined by exchange.
in the end for customers margin benefit is big thing
Hi @simranjit84 All I can say is we follow the margin norms as they are stated by exchange.
We won’t be comfortable in showcasing a lower value of margin upfront - which in an indirect way induces users to trade while the net margin to user is same.
We have received this feedback from many users till now, however we were not comfortable with making the change although it ends up benefiting us.
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