Daily Margin Statement: Meaning & How to Read It

Discover what a daily margin statement shows to learn how brokers report exposure, requirements, and risks for active trading positions.

In the world of equity and derivatives trading, margin is one of the most important components that determines whether positions stay safe or fall into risk. To ensure transparency and protect traders, brokers are required to send a Daily Margin Statement that details all relevant margin-related information for the day. This statement helps you understand how much margin you used, how much is available, whether there is a shortfall, and whether your positions pose any risk of liquidation.

A Daily Margin Statement is a report sent by your stockbroker that provides a detailed summary of all margin-related activities in your trading account for the day. It includes information about:

• Funds and collateral available
  

• Margin used for existing positions
  

• Excess margin or shortfall
  

• Segment-wise exposure (Equity, F&O, Currency, Commodity)
  

• Pledging and unpledging details
  

• Collateral haircuts
  

• Peak margin utilisation
  

• Ledger balance and obligations

The purpose of this statement is to provide a clear view of trading risks and margin status.

SEBI mandates all registered brokers to send margin statements at the end of the day to maintain transparency, accountability, and investor protection. These statements ensure that traders:

1. Are aware of their margin utilisation
   

2. Understand their exposure and risks
   

3. Can add on funds to avoid penalties or forced square-offs
   

4. Receive accurate reporting of their funds and collateral
   

5. Have documented proof of all margin-related transactions

This requirement came into effect following SEBI’s peak margin rules, which tightened the norms for intraday and derivatives risk management. Sending a daily margin statement helps the regulator ensure brokers do not misuse client funds or provide unregulated leverage.

A daily margin report typically includes several key sections. The exact format may differ from broker to broker, but the following components are standard across the industry:

1. Opening Balance and Ledger Summary

Shows your opening funds, credits, debits, and balance carried forward.

2. Collateral Available

Includes pledged securities, their market value, and applicable haircuts. Only the post-haircut value counts as usable collateral.

3. Margin Utilised

Describes the margin blocked for:

• Futures positions
  

• Options writing
  

• Intraday leverage
  

• Delivery margin
  

• MTM losses

4. Peak Margin Utilisation

Indicates the highest margin used during the day—important for SEBI compliance.

5. Margin Shortfall

If applicable, the statement flags any shortfall, which could attract penalties if not resolved.

6. Exposure Margin & SPAN Margin (for derivatives)

Detailed breakup of:

• SPAN (risk-based) margin
  

• Exposure (additional) margin
  

• Total margin requirement

7. Pledge/Unpledge Activity

Shows securities pledged or unpledged during the day along with haircut percentages.

8. Mark-to-Market (MTM) Profit or Loss

Reflects daily profit or loss on derivative futures positions.

9. Funds Available for Trading

Shows how much free balance you can use for fresh trades.

Understanding each section helps you stay compliant and avoid unexpected liquidation or penalties.

In India, NSE brokers must follow SEBI and clearing corporation guidelines when preparing margin statements. Key regulatory points include:

• Brokers must send the margin statement by the end of each trading day.
  

• The statement must clearly distinguish between funds and collateral.
  

• Peak margin reporting is compulsory for all traders.
  

• Collateral value must be shown after haircut.
  

• Derivatives margin must reflect SPAN + Exposure requirements.
  

• Any shortfall must be highlighted for penalty calculation.
  

• Statements must be delivered via SMS, email, or both.

These norms ensure the statement is accurate, tamper-proof, and aligned with clearing corporation data.

Below is a simplified, sample-style breakdown of what a typical statement might contain:

Funds Summary

• Opening Balance: ₹75,000
  

• Pay-in / Pay-out: ₹10,000
  

• Closing Balance: ₹85,000

Collateral Summary

• Pledged Shares Value: ₹1,20,000
  

• Haircut Applied: 20%
  

• Net Collateral Available: ₹96,000

Margin Requirement (F&O Segment)

• SPAN Margin: ₹45,000
  

• Exposure Margin: ₹15,000
  

• Total Requirement: ₹60,000

Utilisation Summary

• Margin Used: ₹60,000
  

• Peak Margin Reported: ₹62,000
  

• Free Margin Remaining: ₹1,21,000

Shortfall

• None

This is an illustrative example—actual statements may include segment-wise segmentation and detailed line items.

Many traders misread or overlook important parts of their daily margin statement. The most common errors include:

1. Confusing Total Collateral Value with Usable Margin

Only the post-haircut value counts as margin.

2. Ignoring Peak Margin Requirements

Peak margin is calculated intra-day, not at EOD. Violations attract penalties.

3. Assuming Ledger Balance Equals Margin

Margin availability depends on settlement rules, segment, and blocked amounts.

4. Not Accounting for MTM Losses

MTM losses reduce available margin instantly, even before the EOD statement.

5. Overlooking Shortfall Alerts

A small shortfall can escalate into a penalty if not corrected immediately.

Avoiding these mistakes helps traders comply with SEBI norms and manage risk effectively.

A daily margin statement is one of the most important risk management tools in trading. It keeps traders informed about their fund balance, collateral, margin utilisation, and regulatory compliance status. Reading the statement carefully helps you:

• Avoid margin shortfalls
  

• Prevent penalties
  

• Manage risk proactively
  

• Understand your true trading capacity
  

• Protect positions from forced liquidation

They provide a summary of margin and exposure, including derivatives and leveraged instruments. A clear understanding of your margin status often makes the difference between safe trading and unexpected losses.

This content is for informational purposes only and the same should not be construed as investment advice. Bajaj Finserv Direct Limited shall not be liable or responsible for any investment decision that you may take based on this content.