As Sebi's peak margin norms kick in, broker default risk should decline now

Peak margin reporting will raise intraday traders' costs; may compel them to adopt hedged strategies

The Securities and Exchange Board of India’s (Sebi’s) mandated peak margin reporting norms have come into force from Tuesday. While the new norms are expected to make the environment safer, intraday traders will need to adapt their strategies.     

Until now, the margin was collected on the basis of the end-of-the-day positions. Exchanges would send a file in the evening and brokers would ensure their clients had 100 per cent of the required margin in their accounts for positions carried over to the next day.

Suppose a client held one lot of Nifty futures at the end of, say,