In the fast-paced world of stock trading and futures and options (F&O) investments, staying on top of financial obligations is crucial. As a stock or F&O trader, it is essential to be aware of the various charges associated with your trading activities. One such important aspect is understanding and managing delayed payment charges.
We will delve into two specific cases that trigger delayed payment charges.
Suppose you have purchased a few shares today. After adding brokerage charges, it was found that the final value is more than the available balance in your trading account. This means you will have a debit balance in your account. When such a scenario arises, you must pay a delayed payment charge or DPC.
A debit balance may consist of one or all of the following:
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The Delayed Payment Charge (DPC) for Motilal Oswal is 0.06% per day. So, you will be charged an interest rate of 21.90% per annum on your debit balance. Although the DPC is calculated daily, it is reflected on your ledger weekly.
In India, the stock exchange mandates every trader in the futures-and-options (F&O) segment to maintain a margin of:
If you don't maintain an adequate cash margin, you must use non-cash collateral to fulfil the shortfall in cash/cash equivalent.
In case you pledge non-cash collateral such as shares or mutual fund units to compensate for the shortfall in money/cash-equivalent, you'll have to pay:
To avoid paying DPC, you should add an adequate amount of funds to your trading account.
If there is not enough fund available in your trading account, you can:
If you don't transfer funds or pay the shortfall, the required debit balance, along with DPC and other charges (if any), will be adjusted against the funds that were credited to your trading account after the sale of your shares.
Stock exchanges charge daily delayed payment charges through stockbrokers, while the total DPC and associated fees are collected monthly and specified in your fund statement. These charges are incurred daily on fund shortfalls from T+2 onwards until payment is made, with the requirement to settle the total DPC charges by the end of each month.