Peak Margin denotes the highest margin requirement for the trading day to ensure sufficient capital for trading positions.
It maintains market stability, prevents manipulation, and protects traders from unaffordable risks by ensuring sufficient funds.
Introduced in August 2021, SEBI's regulations mandate traders to maintain the total upfront margin, with penalties for non-compliance.
Example: Under the new rules, for 100 shares at ₹200 each with a 10% margin, you must have ₹20,000 in your account upfront.
Beginning August 2022, brokers are using Beginning of Day (BOD) rates for margin calculations, reducing financial burden and providing clarity.
Derivatives traders benefit from stable margin requirements throughout the day, reducing short-margin penalties starting August 2022.
SEBI's Peak Margin Rules enhance market stability by compelling upfront margin maintenance, ensuring a secure trading environment.