Risk Management Measures for Trading during Elections Results Announcements Week on Dhan

Hello Traders and Investors,

As the result declaration for General Election 2024 nears, the Indian stock market is likely to remain volatile for the next few days. The India VIX is currently at 24.20.

To prepare for this heightened volatility, we are implementing the following changes in our RMS Policy to safeguard our clients from the volatile movements of the market.

  1. Bracket Orders (BO) and Cover Orders (CO) products will be unavailable starting from June 3, 2024.

  2. The cash segment margin for intraday trading will increase from 20% to 25%, reducing leverage from 5x to 4x.

  3. MPP limit for options trading in NSE as per their price (Refer below table)

Option Price Range MPP Limit
Rs. 0.05 to Rs. 50 20%
Rs. 50 to Rs. 200 10%
Rs. 200 to Rs. 1000 5%
Rs. 1000 to Rs. 5000 2%

What is the MPP Limit?
MPP stands for Market Price Protection. This feature helps safeguard market orders from being executed at unfavourable prices due to price slippage in an illiquid or volatile market.

For instance, if you place a BUY order using Market Price when the Last Traded Price (LTP) is ₹100, but sellers are only available at ₹150 due to poor liquidity, your order would execute at ₹150, resulting in a loss of ₹50. To protect against such losses, market orders in options are placed with protection.

With MPP in place, if you place a BUY order using Market Price, a 10% protection is automatically applied, converting your order into a Limit order at ₹110. If sellers are available at a price below ₹110, your order will execute. If not, it will remain open as a Limit order and expire at the end of the trading day.

Margin Trading Facility & Pledge on Dhan

We are making no changes to the Margin Trading Facility (MTF) and Pledge Benefits that are provided to our users in this period. The current experience will continue for this period.

Trade / Invest Responsibly in this time

Markets are expected to be very volatile during this period, we (as always) would continue to recommend our Traders & Investors on Dhan to trade responsibly and avoid taking unnecessary risks. For the benefit of our users, Dhan offers many Trader Controls on its platform to manage risk effectively in volatile markets. Over 45% of Traders on Dhan use these features regularly, if you haven’t explored we recommend you do so.

We hope markets will stabilise by the end of the week (7th June) and we should be able to revert to normal Risk Policy and measures; if any extensions we will keep you informed.

Thank you,

Kuldeep on behalf of Risk team

8 Likes

This time, unlike February, is a very prudent and a balanced call which mitigates both the risk and doesn’t hamper trading for traders.

Appreciate the approach.

3 Likes

@kuldeep

query regarding intraday in equity only…

compare to friday intraday margins reduced drastic today…

many main stocks moved to 2.x range from 4x or 5x…

difficult to trade with this setup as many main intraday runner stocks moved to 2x…

query1) if can share link of updated excel having new margins listed each stock ?

query2) also timeline when we return back to 5x margins ?

@PravinJ @kuldeep

today’s changes on margin requirements on intraday stocks by RISK team
had been very drastic with reason of election volatility

earlier out of 3k stocks upto 800 stocks were availaible 4x, 5x margin intraday

today only 400 stocks for 4x and 0 stocks for 5x.

now it is very difficult to do intraday trading

Will it be possible to restore old margin requiremnents as early possible ?
any timeline ?

Thanks in advance

@PravinJ @kuldeep
now only 404 intraday stocks on 4x margin out of 3k stocks
reducing top margin stocks to half will drastic impact traders
hope u understand
Atleast communicate on this and clear timeline ?
when we get to normal margins of 800 stocks 5x-4x ?

@nyadav.shopping FYI, Dhan still has liberal margins. AngelOne has stopped all margins altogether. Most other brokerages have reduced it to 1x till Friday.

When are bracket orders being reinstated?

@PravinJ

1 Like

Also on bracket order, is it stopped on Dhan or it is stopped by exchanges for time being?

Hi @Sunita_Kaswan_Choudh

Bracket orders are paused by Dhan given the volatility in the markets. They will be restored in a few days.

Hello traders and investors, now that the election results are in and the markets have stabilized, all risk measures have returned to normal effective 10 June 2024.

@iamshrimohan @kuldeep @PravinJ @moderators

does not seem normal intraday margins in last 2 days
many stocks were 5x intraday margin earlier before this risk control…
example stocks
HGINFRA,IMFA,ADORWELD,CHEMFAB,RANASUG,RIIL …
there will be very long list
now they are 2x only for intraday

earlier in dhan more than 800 stocks were on 5x and 4x margins
now only 635 stocks out of 3k are on 5x and 4x margins
i cross checked most original stocks are back to 5x on broker like icicidirect
it is not at exchange level for sure…it is only dhan this is issue

drastically impacted intraday…
all main intraday stocks u moved to 2x…
please restore original 5x stocks as soon possible

@iamshrimohan @kuldeep @PravinJ @moderators

i see some changes rolled out on margins after my last post
now in excel i can see more than 1200 stocks on 5x intraday margin

BUT issue is intraday order page, margin is still 2x for most

example HGINFRA stock
in above excel it is shown on 5x intraday margin
when we look to place intraday order on dhan getting only 2x margin currently
same is true for many many other stocks

please fix that

@nyadav.shopping Ill get this checked and get back to you

@iamshrimohan
issue seems fixed now
margins are normal now as earlier
thanks for acting fast on it