Will Geojit sell my pledged collateral shares given as margins for MTF positions?
In the event that you do not fund your MTF position as per the intimated Margin Call (email/SMS), and your unrealised losses exceed 50% of the required margin, Geojit's RMS (Risk Management System) will automatically square off your position without further notice.
You will then be intimated via email regarding the loss to be cleared, for which you will be given up to 20 days (depending on the available pledge margin). If you fail to settle this, your collateral pledged holdings will be sold to the extent of the debit to be recovered.
For example:
| Particulars | Amount |
|---|---|
| Purchase Value | Rs. 2,00,000 |
| Cash Margins | NIL |
| Pledged Collateral | Rs. 50,000 |
| Minimum Margin Requirement | 25% (Rs. 50,000) |
| Sale Value | Rs.1,75,000 (due to RMS square off) |
| Loss | Rs. 25,000 |
In the above case, if the client's loss exceeds Rs. 25,000 (50% of the margin requirement), the entire MTF position will be squared off by Geojit's RMS.
The client will then be intimated to bring Rs. 25,000 as cash to settle the loss/debit. In case the client does not settle the debit balance within 20 days (depending on the available pledge margin), his collateral (pledged holdings) will be squared off to recover the debit of Rs. 25,000.
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