RMS Policy

Subject to ChangeRMS Policy

Background

At Shoonya, while investments in securities are inherently susceptible to market risks. Our core objective is to minimize potential losses through our dynamic Risk Management Policy, which is a fundamental aspect of our product offering.

As our valued customer, it is crucial for you to understand how this policy operates to regulate your transactions. Please be aware that this policy serves as a comprehensive set of measures designed to contain risks; it should not be viewed as insurance against losses.

Furthermore, this policy is subject to change in accordance with our ongoing risk assessments and prevailing regulatory requirements. We are committed to adapting our framework to maintain a robust and responsive risk management environment.

Trading limits

Client trading limits are set in accordance with relevant exchange margining norms. Upfront margin, and all other margin norms in the form of Cash or pledge securities (Subject: to Exchange approved securities haircut or higher of Shoonya Haircut), is required before placing any trade.

Acceptable Collaterals for Trading Limits

To facilitate trading and manage risk, clients are required to provide liquid assets that adequately cover their margin requirements. These assets can be in the form of Pure cash other acceptable non-cash collaterals.

1. Cash

The following are considered cash components for trading limits:

• Net Client Ledger Balance: This includes the client's net funds available in their backoffice ledger, incorporating any funds paid in during the day across all segments and exchanges. It also accounts for credit / Debit entries passed in the client ledger for securities where delivery obligations have already been provided adhering to Exchange-prescribed guidelines.

2. Non-Cash Collaterals

a. Securities

We may accept approved securities as defined by the Exchange, and at the discretion of our Risk Team after applying an appropriate haircut. These parameters are decided by us considering our internal policies. The list of approved securities that can be pledged as collateral, along with their respective haircut percentages, is available on our website and is updated on the 1st of every month.

Approved securities are typically liquid, dematerialized securities actively traded on national exchanges and not declared illiquid. These can be pledged as margins following SEBI/NSDL/CDSL/CC regulations.

• An appropriate haircut is (Exchange approved securities haircut or Shoonya haircut whichever is higher) will be applied to the closing price of the securities as prescribed by the Exchange. The value after this haircut will be considered for pledged securities and valued for trading purpose.
• We reserve the right to re-pledge approved securities to Clearing Corporations. In case of client default, ledger debit recovery cases or any regulatory actions, we and/or the Clearing Corporations are entitled to invoke these pledged securities.

b. Mutual Funds

• Clients are permitted to pledge open-ended Direct Mutual Fund units available in demat form as collateral, provided they are from the list of approved Mutual Funds specified by the Clearing Corporation.
• An appropriate haircut (Higher of Exchange haircut or Shoonya haircut) will be applied to the closing NAV of the Mutual Fund units as prescribed by the Exchange/AMFI.
• The collateral value of Mutual Fund units is determined after this haircut. Please note that there are member-level limits set by the Clearing Corporation on the total value of Mutual Funds provided as non-cash collateral, which may restrict the amount you can pledge.

Please note that Collateral margin cannot be used for equity delivery positions (Cash and Carry product, CNC) or for Options premium Buy positions. The company reserves the right to change or withdraw leverage offerings at any time based on market conditions. This decision is at the company's sole discretion.

3. Valuation Rates for Margin Reporting

• Scrips/Exchange Traded Funds: Valuations are based on the T-1 day rate as per NSE Bhav copy. If a scrip is not listed or traded on NSE, the BSE Bhav copy rate will be applied.
• MF units will be valued as per the AMFI NAV file of the T-1 day.
• G-sec and T-bill shell be valued daily based on previous days MTM prices as specified by CCIL

Please note that in case of pledge securities valuation for reporting and for trading purpose could not be alike.it may differ in some cases due to variation in Shoonya approved securities haircut norms.

Settlement Holiday Margin Calculation Process
At a glance, a settlement holiday is a day when the stock market is open for trading, but the final transfer of funds and shares for your trades is temporarily on hold. because either the depositories (CDSL and NSDL) or the banks are closed on that day.

On event of settlement holidays, credits from the following transactions will not be reflected in your trading balance on those days:

• Profits (both realized and Mark-to-Market) from all segments, including commodities.
• Credits from existing option premium.
• Credits from CNC sell trades.

Additionally, stocks bought on previous working day will not be reflected in your trading account for selling until the settlement process is completed.

Collateral Margin Policy

Collateral Margin Availability and Valuation

Collateral margins will be made available for use on T+1 day (the next trading day). A list of securities approved for pledge as collateral, along with the applicable haircut percentages, is available on our website and updated
1st day on every Months. The haircut rate is determined by our internal risk policy, which may be stricter than exchange-defined margins and can change at Shoonya risk team sole discretion.

For example, a 10% haircut on a security worth ₹1 lakh means ₹90,000 (90% of ₹1 lakh) will be available as
collateral margin.

Valuation: The value of your collateral will be calculated in real-time, considering the worst-case scenario,
Which is the lower of the Last Traded Price (LTP) or the previous day’s closing price.

Understanding your Margin (Margin Statement vs. Trading Platform)
The collateral value shown in regulatory margin reports may differ from the value on the trading platform. This is because: Margin Statement: A daily margin statement is a report that provides clients with information regarding their margins. It includes information on deposited margins, such as fund transfers and pledged collaterals, as well as blocked margins for held or taken positions. The report aims to inform clients of the following:

1. Margin required by the exchanges for the positions taken or held.
2. Availability of free margins in the account as compared with exchange margin. Key points to consider (Shoonya imposed some additional margin that is over and above the exchange margin as per Shoonya internal policy also comply with SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2024/110 (RIGHTS AND OBLIGATIONS OF STOCKBROKERS AND CLIENTS) on Margin clause. You might notice a difference in the margin component when comparing your trading system with your statements. This difference is isolated to the margin figures; all other components, including your collateral details, will align with the figures on your margin statement.
3. Margin shortfall in the account so that the clients can maintain adequate funds to avoid any margin penalty or risk forced square off.

Trading Platform: ideally, collateral limits are based on our internal haircut policy, which may be stricter than regulatory margins. Hance, For the purpose of margin Reports and exchange margin reporting, standard margins (VaR + ELM or any other rate of margin as defined in regulatory guidelines from time to time) will be applicable as the haircut. Thus, Collateral valuations in the margin report will be as per regulatory margins whereas on the trading platform for the purpose of collateral limit, it will be as per internal haircut policy which may be stricter / higher than regulatory applicable margins.

Handling Debit and Shortfall

Aging Debit: We will block further exposure for clients with an 'aging' debit after T+5 trading days. This debit may be liquidated T+5. This timeline is subject to change with due communication.

Forced Liquidation: If a significant decline in the value of your pledged collateral, or a Market-to-Market (MTM) loss, causes your available margin to fall below a defined threshold, your positions and collateral may be squared off without any further notice. You are solely responsible for any costs and consequences arising from this liquidation. The square-off threshold may be changed at Shoonya Risk team discretion, with changes being communicated.

Usage and Communication

Usage Restrictions: Collateral margins are not available for exposure in the "Delivery product" i.e. CNC of the Equity segment. The use of collateral margin for option buying will be disallowed based on our internal policies.

Margin Calls & Liquidation Communication: Margin call and liquidation communications will reflect the collateral value post-haircut or at the LTP, depending on the specific liquidation parameters.

• For regulatory shortfall reporting, the valuation will be based on the haircut rate specified by regulatory guidelines or by the Shoonya discretion.
• For MTM loss or a steep fall in collateral valuation (e.g., more than 70% or another internally defined threshold), the calculation will be based on LTP, and positions will be liquidated without notice.
• We also send real time MTM alert and Margin alert based on our trading system calculated predefined alert set % to client for intimation and actions. Now client responsibility toy takes the appropriate action to avoid any unwanted debits on their trading accounts.

Policy Changes

Corporate Actions: In the event of a corporate action or a security being removed from the approved list, your collateral may be removed from the list to mitigate price risk. If you fail to provide replacement funds or collateral, the pledged collateral may be liquidated to prevent a shortfall, and you will be responsible for all consequences.

Amendment Rights: The company reserves the right to amend or modify any of these policies at any time, with due intimation to the client. The client will be bound by the changes once they are communicated.

Discretionary Limits settings and Client Acknowledgment Across All Segments

At Shoonya, we establish and update client limits across all trading segments to ensure prudent risk management and compliance with regulatory guidelines.

Shoonya reserves the right to impose and adjust trading limits (including exposure, turnover, and value limits) on orders placed through our system. These adjustments can be made urgently and without prior notification based on our risk perception, relevant market factors, and directives from Exchanges or SEBI. By trading with us, clients acknowledge and agree that Shoonya will not be held responsible for any variations, reductions, or impositions of limits, nor for any resulting inability to route orders.

Furthermore, Shoonya may refuse to execute orders or alter established limits (whether set by Shoonya, Exchanges, or SEBI) for any reason deemed appropriate. Clients agree that any losses incurred due to such refusal or delay caused by these reviews will be borne exclusively by the client.

Parameters for Margin Calculation

When calculating and reporting available margin, the following parameters are considered:

• Clear credit balance in the client's settlement and margin ledger accounts.
• Value of pledged securities (after applying appropriate NCL approved securities haircuts OR Higher of Shoonya haircut).
• Any successful online fund transfers.
• For derivative, clients are permitted to trade only up to the applicable client-wise position limits set by Exchanges/Regulators from time to time.

Important Notes

• Shoonya may also apply specific scrip-wise margins as prescribed by the Exchange from time to time.
• Shoonya will impose additional margin (i.e. higher of exchange margin) from time to time as per the Shoonya discretion as reference of SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2024/110 (RIGHTS AND OBLIGATIONS OF STOCKBROKERS AND CLIENTS) in Margin clause.

Pledge and Depository-Related Issues

Shoonya will not be responsible for any delays or non-receipt of links/OTPs from depositories for pledge creation, non-confirmation of pledge requests by the client, or any other issues arising at either the depository's or Shoonya end.

50:50 Ratio (Cash to Non-Cash Collateral) Margin Rules

The exchanges require that 50% of the margin for derivative positions must be in cash or cash equivalent collateral, while the remaining 50% can be in non-cash collateral margin.

For Example: If Client X pledge 100 shares of Reliance which is trading at Rs.2520 in order to take position in Futures. The value of his pledged request will be (100*2520) = Rs.252000.

Assume that 20% haircut will be deducted from the pledged value (20% of Rs.252000 = Rs.50400). Therefore, the balance becomes Rs.201600 (252000 - 50400). As per the cash to the collateral ratio of 50:50, Rs.100800 (50% of Rs. 201600) will be used from free cash and the balance Rs.100800 from collateral value. .

Fund Payin and Payout process

All payments for margin must be made in electronic form, including NEFT, RTGS, UPI, or any other mode of transfer made available by us.

Note: Fund withdrawal requests are accepted between 08:30 AM to 05:30 PM on trading days, PM (excluding non-trading days and settlement holidays). The Fund Payin timings through Shoonya are from 08:30 AM to 05:30 PM (excluding non-trading days). You can transfer funds through any of the following modes:

• Through UPI: You can transfer funds through UPI from the Shoonya trading platform. It is instant and free mode.
• Through NEFT/RTGS/FT/IMPS: You can transfer funds through NEFT, RTGS, Fund Transfer, and IMPS into our virtual account without additional transaction charges. Funds will be updated instantly once received.
• Through Payment Gateway: You can directly pay through the Shoonya trading platform using your Internet banking. Funds will be updated instantly

Margin and Margin Collection Policy

What is Margin?

Margin is the minimum amount of funds required to place an order in exchange, as prescribed by stock exchanges from time to time.

All exchange-mandated margins, such as,

Capital Market:

• Mandatorily collect minimum 20% upfront margin in lieu of VAR and ELM etc.
• Other margins (MTM, delivery, special) to be collected within T+1.

F&O Segment:

• Mandatory upfront collection of initial margins (Span), Exposure margin and Net buy premium,
• Other margins and MTM losses to be collected by T+1.

Currency Derivatives:

• Mandatory upfront collection of initial margins, net buy premium, and extreme loss margins.
• MTM losses to be collected by T+1.
• Final settlement for currency futures to be collected by T+1.

Commodity Derivatives:

• Mandatory upfront collection of initial and extreme loss margins and net buy premium
• Other margins (MTM, delivery, special) to be collected within T+1.

The specific margin requirements are as follows:

• For buying options: The premium amount plus any additional delivery margin charged before physical settlement.
• For shorting options and for Futures: SPAN + Exposure + Delivery margin charged during physical settlement + any other additional margin levied by the exchange or us.

Any hedge benefit will be provided on the SPAN margin only as per the relevant positions of the client and based on the exchange-mandated hedge benefit calculation.

Effective September 1, 2021, SEBI's peak margin regulations have reduced intraday leverage to ensure 100% of the required margin is collected for all equity and derivative positions.

For equity intraday trades, the minimum margin will be 20% of the trade value, considering stock volatility (VaR +ELM + Adhoc margins from the exchange) and any other margin imposed by exchanges from time to time. At Shoonya, for our intraday equity product (MIS), the margin may vary based on the risk team's discretion. You can view the daily updated list of leverage for various equity shares on our website.

SHOONYA: Intraday limit script

Understanding Additional Margin for Expiring Index Options:

As per recent regulatory changes with SEBI circular SEBI/HO/MRD/TPD-1/P/CIR/2024/132 dated October 01, 2024, on the day of options contracts expiry, to increase the tail risk coverage, an additional Extreme Loss Margin (ELM) of 2% shall be levied on short index options contracts. An additional ELM of 2% would be applicable for all open short index options at the start of the day, as well as for short index options contracts initiated during the day that are due for expiry on that day. Furthermore, Due to the substantial trading volumes and heightened basis risk observed on expiry days, the benefit of offsetting positions across different expiry dates (calendar spreads) is prohibited on the day of expiry. This restriction aligns with the cross-margin framework for correlated indices, where such benefits are removed at the onset of the first expiring index.

As worst-case loss is calculated independently, no additional calendar spread margin is levied on contracts expiring that day. Furthermore, the Extreme Loss Margin (ELM) for calendar spreads involving same day expiring contracts will be calculated without considering these positions as offsetting spreads.

Standard margin calculations for calendar spreads with non-expiring contracts remain unchanged.

Illustrative Example:

• If monthly expiries are on the 29th (current), 30th (next), and 31st (far month), the calendar spreads

between 29th/30th or 29th/31st will not receive calendar spread treatment on the 29th.

• However, a calendar spread between the 30th and 31st will still receive calendar spread treatment on the 29th

Other Key Points

Use of Option Selling Premiums

Any premium received from option selling may only be used to buy other options. This premium cannot be used for any other purpose, including taking positions in futures. This policy is in place to ensure compliance with the margin reporting framework and to prevent penalties for short margin collection.

Handling of Mark-to-Market (MTM) Profits and Losses

Realized or unrealized profits from Mark-to-Market (MTM) calculations on the trading day (T-day) will not be considered for exposure or monitoring. The benefit of these profits will only be applied upon settlement. However, all realized and unrealized losses will be immediately deducted from your available margin.

Limits and Caps

To ensure sound risk management, we have implemented certain restrictions on transactions and total turnover, which are updated periodically. Key caps include:

• Single Order Limits: A maximum quantity and value (in Rs) for any single order.
• Client-Level Caps: A maximum exposure and turnover limit for each individual client.
• Underlying-Level Caps: A maximum exposure and turnover limit for each underlying security.
• Client Position Limits: Maximum position limits per client, as prescribed by exchanges and our internal policy:

Contracts Allowed for Trading

To mitigate the risks associated with low liquidity, we only allow trading in the following contracts. Trading in illiquid contracts is highly risky for both you as a client and for us as a broker.

• NFO (NSE Future and Option):3 consecutive Near Monthly contract + 2 Far Months contracts allowed as per Shoonya discretion.
• CDS (Currency Derivatives): All expiry contracts are allowed.
• BFO (BSE Future and Option):3 consecutive monthly (Sensex/Bankex) liquid contract only as per Shoonya discretion.
• MCX/NCDEX:2 consecutive monthly contracts will be allowed for an expiry (current and next) only. Contacts for later months may be opened nearing the current month expiry at the discretion of Shoonya.
• NCOM:2 consecutive monthly (Natural gas and Crude oil) liquid option & Electricity Future contracts only as per Shoonya discretion.

Trading Products

MIS (Margin Intraday Square-Off) The MIS product type is specifically designated for Intraday trading in Equity, F&O Future & Option, MCX Future, and Currency Future & Option, meaning you square off the position the same trading day. It stands for Margin Intraday Square-off. Note- we do not allow MIS for BSE Derivative, MCX Option and NCDEX contract.

BO (Bracket Order)/CO (Cover Order) Product type is specifically designated for Intraday trading in Equity, F&O Future, MCX Future, and Currency Future. Note- we are not allowed BO/CO for BSE Derivative, BSE Currency Option and NCDEX.

CNC (Cash and Carry) This applies for holding delivery Equity (Cash) positions overnight for delivery. It stands for Cash and Carry. Did you know? When using CNC to buy and sell a share within the same day, it will still be regarded as an intraday trade.

NRML (Normal Order) This stands for Normal Product, whereby no leverage is applied. The product type is specifically designated for Derivative, Currency, and Commodity.

Please note that intraday square-off timings can change at Shoonya discretion. It is Client solely responsible for squaring off all open positions within these times.

If an intraday or MIS trade isn't squared off on the same day for any reason including a system or link failure. now it will be converted to a Cash and Carry (CNC) or NRML position and carried over to the next trading day. In such a case, client will be responsible for squaring off the position and cost arising for this.

Our Risk Management (RMS) team may close out any such position if there isn't enough cash in your account, without needing to issue a margin call. This action is at Shoonya discretion and may happen without any prior notice or intimation.

All Bracket Order (BO), Cover Order (CO), and MIS positions will be automatically squared off at the end of each trading day.

Intraday Square off timings:

Commodity Trading 9:00 AM to 11:30 PM (March to November) and 9:00 AM to 11:55 PM (November to March) during daylight saving time. Now commodity intraday square off adjusted accordingly having 15 min prior to the market closing.
Market order

Market Order: - A Market (Mkt) order will be executed promptly, subject to availability of orders on opposite side, without regard to price and that, while the customer may receive a prompt execution of a "market" order, the execution may be at available prices of outstanding orders, which satisfy the order quantity, on price time priority. It may be understood that these prices may be significantly different from the last traded price or the best price in that security / derivatives contract. However, because the order is executed instantly, the share may be purchased at a higher price or sold at a lower price. it’s the nature of the order routing process in exchange for market order. At Shoonya Market orders are not allowed in Nifty or Bank-nifty quarterly expiry option contract. Also, AMO market order in (BSEFO) option derivative contract is not allowed at Shoonya.

Note: We recommend using the Market Price Protection (MPP)feature for market orders. This feature ensures your order is only executed at a price within a certain range around the current market price. The MPP feature acts as a safety net by automatically converting a market order into a limit order if the current price moves too far away from the LTP. This prevents the order from being filled at a much higher (for a buy order) or lower (for a sell order) price than intended. MPP minimizes the risk of your order being filled at an unfavorable price due to sudden market movements or dealing with illiquid contracts or due to a parity price gap between BID and ASK prices which are not stable during market open. Now by converting the order to a limit order, MPP helps you avoid potentially large losses that can occur with market orders in volatile markets. Customers should be aware that placing AMO Market orders in volatile contracts carries a risk of unintended losses. This is because, before the market opens, the system validates AMO orders against the previous settlement price as there is no live bid/ask or Live Traded Price (LTP) data available from the exchange broadcast. Consequently, during periods of high volatility, these contracts can experience significant gap openings. This can result in AMO Market orders executing at prices far beyond the initially validated price potentially leading to unnecessary losses.

Please note that Stop-Loss Market (SL-M) orders are not allowed on Shoonya for most equity, derivative, and commodity segments traded on the BSE and for Index options on NSE due to being discontinued by the exchanges to prevent erratic executions. Instead, you should use Stop-Loss Limit (SL) orders, which can function similarly to SL-M orders by setting a price limit to cap potential losses.

Intimation and Handling of Margin Shortfall

1. Notification of Shortfall

Shoonya may send a communication via email or system generated auto notification to inform margin shortfall, this is done at our discretion as a measure of good governance. Such notifications may include a stipulated time for customer to reduce the shortfall, either by adding funds or squaring off positions before prescribed deadlines. Customers can also check their margin status on the Shoonya trading application (Mobile, Web, or Exe) daily after 7:30 AM, once risk team's BOD process is complete. It is customer responsibility to continuously monitor the positions and account balances to ensure there is no shortfall. We are not obligated to provide notification.

2. Liquidation of Positions

We reserve the right to liquidate positions to cover a margin shortfall without prior notice under the following circumstances:

• You fail to adhere to a provided timeline for reducing the shortfall.
• There is significant market volatility.
• An exchange or regulator directs us to take action.
• Your available margin falls below the threshold for a forced square-off.

3. Disclaimer of Liability

We shall not be held responsible for any losses you may incur as a result of the liquidation of open positions to cover a margin shortfall.

Clearance of Debit Balance

1. Settlement of Accounts

Clients who have opted for a monthly or quarterly settlement are required to abide by the settlement schedule. If a continuous debit balance exists, we reserve the right to settle the account by selling the client’s holdings. This applies to both trading debits (e.g., MTM losses and other obligations) and non-trading debits (e.g., DP dues, other charges) etc.

2. Handling of Unpaid Securities (CUSPA)

In accordance with SEBI guidelines (effective November 2022), securities not fully paid for by a client will be transferred to their demat account. This will be followed by an automatic pledge of these securities in our favour, with the reason "unpaid."

At our discretion, we may create this pledge for any debit balance, covering approximately 150% of the debit value (or as per regulatory guidelines) to account for market price fluctuations. These pledged securities may be liquidated from the CUSPA (Client Unpaid Securities Pledgee Account) on T+3 working day or anytime thereafter, with or without prior notice, to clear the outstanding debit.

Shortfalls and Risk-Based Force Square-Off

Understanding Shortfalls

Shortfalls can arise due to the volatile nature of the market, for all segment and exchange. A shortfall occurs when your available margin falls below the required margin. This can be caused by:

• An increase in margin required, such as a rise in exchange-mandated margins due to market volatility or additional margins for physical settlement.
• A decrease in margin available, due to factors like fund payouts or Mark-to-Market (MTM) losses, peak margins etc.

Shoonya Risk Square-Off Process

If a shortfall occurs, your positions may be squared off to cover the entire shortfall amount.

• Order Execution: To mitigate high impact costs and comply with Risk and compliance, square-off orders for margin shortfalls in all derivative segment will be placed in a maximum of 20 lots for any single transaction.
• Intimation and Timelines: We will inform the shortfall amount as per exchange margining norms. While we will make every effort to communicate in a timely manner, now customer is responsible for always monitoring their positions accordingly.
• Extreme MTM Loss: In cases of extreme MTM losses from price movements, we will liquidate positions on a best-effort basis. However, you will remain liable for any losses incurred.
• Shoonya also send real time Margin Alert and MTM alert if the alert threshold hit at 50% with incremental of 10% each step up 80% on final over and above to the respective customer positions.

Ban Period

During a ban period, no new positions or rollovers of existing positions will be permitted. However, clients are permitted to square off their existing positions in Shoonya.

Scrips Blocked for Trading

We may, at our discretion, impose restrictions on trading for specific scrips and contracts, even if a client has sufficient credit or margin available. The list of such restricted scrips is subject to periodic revision.

We will not be held responsible for any non-execution, delayed execution, or any resulting financial or opportunity loss to the customer for orders placed on these restricted scrips. This policy applies even if a customer has previously traded these securities on our platform.

Summary of scrips blocked for trading:

Any securities as per regulatory mandate / communication or at the discretion of the company might be blocked on case-to-case basis

Client Responsibility and Liability

• Post-Market Margin Calls: If a margin increase is mandated by the exchange after trading hours, you must fund your account by the end of the day. Failure to do so may result in a penalty for short collection of margins, which will be passed on to your ledger (as permitted by regulations).
• Recovery of Losses: All losses from daily settlements and liquidations that are not paid will be recovered by selling available shares in your account. You are liable for any remaining balance.

Forced Square-off for Short Options

If the net premium for your open options positions erodes your available margin by more than 80%, the positions for your short options will be squared off. This action is taken if your margin available post-premium falls to 20% or less.

Physical Settlement of equity derivatives on expiry

As stated in SEBI circular, starting from July 2018 expiry, F&O positions are being settled moved from cash settlement mode to compulsory physical delivery settlement in a phased manner. Starting from October 2019 expiry, all stock F&O contracts will be compulsorily physically settled. If you hold a position in any Stock F&O contract, at expiry, you will be required to give/take delivery of stocks.

The deliverable quantity is computed as under: Unexpired Futures

Long futures shall result in a Buy (security receivable) position short futures shall result in a Sell (security deliverable) position

In-the-money Call (CE) options

Long call exercised shall result in a Buy (security receivable) position Short Call (CE) assigned shall result in a Sell (security deliverable) position

In the money Put (PE) options

Long Put exercised shall result in a Sell (security deliverable) position short Put (PE) assigned shall result in a Buy (security receivable) position.

The quantity to be delivered/received shall be equivalent to the market lot* the number of contracts that result in a delivery settlement.

Stock Deliverable Positions (Give Delivery)

For short futures, short calls, and long puts, Customer may be required to deliver the underlying stock upon expiry. The stock will be debited from the customer demat account, including any pledged holdings, to meet this obligation for DDPI/POA account and for Non-POA accounts, Customer must provide EDIS authorization before 12 PM for an equivalent quantity of all positions marked for give delivery on expiry day.

Customers without the marked physically settled stock in their demat account on the expiry day can purchase the same stock on that day. This purchase will be netted off against their delivery obligation, as per regulatory requirements.

If the customer does not make this purchase or not provide EDIS authorization, now their position will be marked for auction settlement. In this scenario, the customer will be responsible for all associated charges and penalty.

Please note: The non-availability of stock in your demat account will result in a short delivery and an auction penalty. To avoid this penalty, you can still buy the stocks in the post-market session.

Stock Receivable Positions (Take Delivery)

If you have a "take delivery" position after expiry but don't have enough funds in your trading account, your account will go into a debit balance. An interest will be charged on this debit. In this situation, our RMS team may sell the stock to recover the debit balance and if any margin shortfall will reduce position accordingly.

For clients without a DDPI/POA, a pledge will be created on the delivered stocks in Favor of Shoonya. You will be notified by email to deposit funds or sell the stocks to clear the debit. If you fail to meet the obligation, Shoonya will sell the stock to cover the outstanding balance.

Stocks Undergoing Merger or Demerger

In the event of a merger or demerger, F&O contracts on the affected stocks will be force-closed and physically settled on a single, specified expiry date. These contracts will then be subject to physical delivery margin requirements.

Key points:

As of Tuesday, the last day of expiry, new positions are not permitted for current month Stock options contracts placed via NRML orders. This is to ensure current expiring positions are in "square-off" mode. However, you can still trade using MIS, BO, and CO order types. Please note RMS liquidation starts after 12:00 PM on the expiry day. in case you do not have entire contract value by Multiplying Lot size and LTP* for future contract and notional value (Strike *Quantity) for option contract for taking delivery.

Please note- "Square off" mode means you can close your existing open positions, but you cannot open any new ones in the current month's expiring contracts.

The exchange will begin by imposing a delivery margin on long, in-the-money (ITM) options starting (Four) days before their expiration. The margin will be applied as follows:

If client don't meet the margin obligations on time, now the positions may be squared off and client will be responsible for any losses that occur as a result.

In the event that our RMS team is unable to square off a position due to a margin shortfall or any other condition, it may lead to compulsory physical delivery. client will be responsible for all costs and risks associated with this physical delivery process.

Margin and Margin Collection (Commodity Derivatives)

Margin is the minimum amount of funds required to take a position in the commodity derivatives segment, as prescribed by the exchanges.

The total margin collected includes:

• All exchange-mandated margins (e.g., SPAN, Exposure, Tender Margin, Delivery Period Margin, Special Margin and Additional margins).
• Including over and above any additional margins that we, at our sole discretion, may levy.

Specific margin requirements are as follows:

• For buying options: The premium amount plus any delivery margin charged before physical settlement.
• For shorting options and for futures: SPAN + Exposure + Delivery margin (charged during physical settlement) + any additional margin levied by the exchanges or us.

Any applicable hedge benefit will only be provided on the SPAN margin, calculated based on the client's relevant positions and the exchange-mandated hedge benefit calculation.

Upfront Margin and Company Discretion

Clients are required to provide these margins upfront before taking any positions. We reserve the right to charge a higher margin than the minimum stipulated by the stock exchanges, based on our internal Risk Management policy.

Managing Margin Shortfalls

Clients are responsible for monitoring their positions in real-time and must ensure there is never a margin shortfall.

• Liquidation: If a shortfall occurs and continues, clients must strictly adhere to the liquidation timelines we provide.
• Penalties: Any penalties levied by the exchange for a margin shortfall may be passed on to the client's ledger. This includes penalties resulting from a hedge break or the loss of cross-margin benefits (e.g., when a client squares off a leg of a hedged position or a leg expires).

MCX Devolvement policy on expiry

Upon expiration of a commodity options contract held on the Shoonya platform, any contract that is In the Money (ITM) will be automatically converted (devolved) into a futures contract for the same underlying asset from the very next trading day of expiry.

When an In-The-Money (ITM) commodity option contract converts into a futures contract, it's called devolvement. The strike price of the devolved option becomes the average buy or sell price for the new futures contract.

If client having an ITM option and don't have enough margin in their account to cover the futures contract, your position will be squared off after 9 PM on the expiry day. However, if you have sufficient margin, the option will devolve into a futures contract the very next day.

The exchange gradually blocks a portion of the required futures margin:

• Two days before expiry: 25% of the futures margin
• One day before expiry: 50% of the futures margin
• On expiry day: 100% of the futures margin

If Client fails to meet these margin requirements, Shoonya may square off your open positions. In cases where an ITM options trade cannot be matched with a counterparty, it will be cash-settled.

For a short position to be settled, the counter-buyer consent. If you hold open hedged positions on the expiry day, they might be netted off, meaning they will not be carried forward.

For example, if you have a long futures position and a short call option, the short call option will devolve into a short futures position after 11:30 PM on the expiry day. The two positions will then be netted off against each other and won't be carried forward to the next day.

Customer Information and Risk Disclosure

Internet-Based Trading (IBT)

Shoonya is authorized to offer online trading platforms and complies with all SEBI regulations for Internet-Based Trading (IBT).

• client will receive a unique user ID and can set own password. clients are solely responsible for keeping your login credentials secure also responsible for any actions taken using your account, even if someone else uses it without your permission.
• Client acknowledges that online trading is not risk-free and can be subject to technical issues. Neither Shoonya nor the exchange guarantees that services will always be available without interruption.
• Shoonya is not liable for any actions, losses, or damages (actual or notional) that occur from the suspension, interruption, or failure of our IBT system, the exchange’s systems, or any link/system failures that are beyond our control.

Risk Disclosure

Trading in equities, derivatives, and other instruments carries inherent risks and may not be suitable for individuals with limited resources, experience, or a low tolerance for risk. You understand that there is no guarantee of profit and no protection from losses. If client experience adverse consequences or losses from trading, you are solely responsible. Neither Shoonya, the stock exchanges, nor SEBI can be held responsible.

Common Trading Risks:

• Higher Volatility: Volatile markets can cause your orders to be partially executed or executed at a price significantly different from what you expected, which can lead to losses.
• Lower Liquidity: Securities with few buyers or sellers can be difficult to trade quickly or at your desired price, potentially causing partial execution or no execution at all.
• Wider Spreads: A wider spread between the buying and selling prices of a security can mean you pay more to buy or receive less to sell.
• Risk-Reducing Orders: Orders like stop-loss or limit orders may not be effective during rapid market movements, making it impossible to execute them.
• System Risk: High trading volume or technical issues can cause delays in order execution or confirmation. Trading systems rely on technology that is susceptible to failures, which can delay or prevent your orders from being processed.

Business Continuity Management Policy

The purpose of this policy is to ensure the continuity of our critical services during a disruption. Our objectives are to ensure the availability of our online services, minimize downtime, and protect critical data and systems.

Alternative Communication in Case of connectivity Failure:

In the event of a connectivity issue, you can use our ‘Call and Trade’ desk. After providing personal details for manual authentication, a dealer can place trades on your behalf. You will receive a nationally accessible number for this service.

Note:Trading through our Call and Trade desk involves complex systems that are susceptible to interruptions. Shoonya does not guarantee continuous and uninterrupted access.

Information Security:

• Our systems are hosted at Tier-3 data centers in Mumbai and Hyderabad also Amazon cloud Services data centres in Mumbai and Hyderabad, which have state-of-the-art redundancy measures.
• We operate with a production server and a real-time synced backup server to ensure data is continuously updated.
• Data is backed up securely in multiple locations: on the same server, on the backup server, and secured cloud. Our database is backed up daily and stored securely.
• In the event of a primary server failure, our secondary server will take over to ensure continued communication on the trading platform.
• Furthermore, in the event of a Primary Site goes down, our DR (Disaster Recovery) Site will take over to ensure continued communication on the trading platform.

Recovery Procedures:

• Network Failure: Our systems use redundant hosting at data center to maintain uptime.
• Data Recovery: Data backups stored in multiple locations allow for quick restoration of access.
• System Failure: We run parallel servers to avoid single points of failure and provide services with limited downtime.

Disclaimer for Uncontrollable Events

Clients agree and accept that due to reasons beyond our control—such as force majeure events, disruptions in communication networks, system failures, delayed system responses, trading halts, or exchange-imposed circuit filters—open intraday positions may not be squared off and could be carried forward.

In such instances, you are expected to square off these positions on a best-effort basis as soon as possible. All losses resulting from these events will be your sole responsibility. We will not be liable for any losses or consequences arising from such situations.