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F&O
Asked a question last year

Can I offset my daily M2M loss(not booked loss) by extra margin limit which I got by pledging my collateral instead of maintaining 20% cash?FOR THE PURPOSE OF OPTION SELLING. Example: By pledging I get limit of 100rs, out of which I take position for say 30rs. Suppose now if I incur M2M loss of rs20 can I pay with my remaining 70rs in my limit instead of paying or even maintaining 20% cash in my account? Iam asking this question because M2M Settlement in option selling is exchange obligation not counter party obligation like futures.

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Hi @A P SATHISHKUMAR18,

As of now, we have not levied any restrictions towards maintaining a cash balance of 20%. However, you're recommended to maintain a minimum balance to meet M2M requirements. 

If you've not kept the required cash in your account, and say you've incurred a loss, then you will have a debit balance of your loss incurred. You will either have to bring additional (required cash), or you will need to sell your securities in order to clear your Debit balance. 

The loss will not be offset by the Margin amount.

Hope this addresses your query!