Hello,

Just want to clarify this.

Other day I was doing margin trading on Madras Cements. Price was moving other way than anticipated by me. I was determined, that it would drop so that I can make at least 1% profit. But just @ this time, system took control of my cover order - canceled it - squared off @ market price. So I ended with 2.5% loss.

I hold trading account with ICICIDirect. When I checked with ICICIDirect they told that if a scrip moves +/-16% from previous close price then all open positions, for margin, will be squared off and no further margin trading will be allowed.

What I would like to know is this market regulator's rule or just I-Sec's?

Cheers

Uday

After 2/3 mail exchanges, this is what their support team had to say at last.

With reference to your query regarding clarification on the margin square off. We understand your concern. Further +/-16% from previous close price is as per the decision of the Risk management Committee as to prevent the more loss to the traders when stock goes +/-16% from previous close price.

So it's just I-Sec's policy and ain't SEBI's.

Of course, it's not SEBI's policy.

SEBI or the stock exchanges don't tell people when to buy or sell any share.

In case of intra-day trading, the exchanges allow brokers to keep positions open as long as they provide adequate margin to the exchanges.

Maybe I-Sec introduced this rule to save intra-day traders from getting trapped at circuit limits.

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