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+ Expand AllMargin Intraday Square Off - FAQs

  • QWhat is the Margin Intraday Square Off (MIS) order?
    A
    Margin Intraday Square Off, also popularly known as MIS order, is a facility wherein you get to take higher intraday trading position/s using cash and holdings (stock) as margin. All such positions need to be compulsory closed before the close of market hours on the day itself. In case, any or some of your MIS positions in the equity segment remain open after the 3:20 PM stipulated deadline and/ or 20 minutes prior to the closing hours for the currency segment and/ or 30 minutes prior to closing hours of the commodity segment or breach of the cut-off value, our system will auto Square-Off all such position/s except in equity index options on expiry day.
  • QWhich segments can I trade in with MIS?
    A
    You, as a client availing the MIS facility, can execute intraday trades in the cash segment, stock futures, index derivatives and currency (USDINR futures only) on the National Stock Exchange (NSE) and commodity futures on the Multi Commodity Exchange of India Limited (MCX).
  • QWhich stocks/contracts can be traded in MIS?
    A
    You can check the complete list of stocks/ contracts available for trading under the equity segment, commodity segment and the USDINR future contract (Current month contract will not be available on the expiry day).
  • QWhat kind of exposure can I get for my intraday trades using MIS?
    A
    You can get exposure both while creating a buy (long) side or sell (short) side position, including writing of index options. Click here to check the exposure on select stocks & contracts.
  • QWill I get the margin benefit if I create a hedge position in equity derivatives using MIS?

    A
    Yes. You will get the margin benefit in this case.
  • QWhen will my positions get squared Off?
    A
    Your MIS positions will be Squared Off in three scenarios, whichever is earlier:

    i. If the net unrealised loss on your overall MIS position breaches the cut-off value;
    ii. If the positions have not been squared off by 3:20 p.m. in case of Equities, 4:40 p.m. in case of currency & 30 minutes prior to market close in case of commodities, then the MIS positions will get auto squared off except in index option on expiry days
    iii. If cut-off value is less than or equal to ‘0’.

    All pending (Open) MIS orders would also get auto cancelled before squaring off the positions.
  • QWill brokerage be charged if I have subscribed to FIT/TFP plan?
    A
    No, brokerage will not be charged in MIS trades as per FIT/TFP plan.
  • QHow is the cut-off value calculated?
    A
    The Cut-off value at any given point of time is calculated as Margin Available (Cash & FNO) for cash segment * and 75%# of margin utilised for all your open MIS positions.

    *Margin Available (Cash & FNO) for cash segment = Cash + Stock as Margin – Net Realised Loss – Net Unrealised Loss – Margin Utilised Across All Products + Option Premium Received – Option Premium Paid – any other debt obligation.

    Following is the formula for deriving the Cut-Off value:-
    Factor 1: Margin Available (Cash & FNO) for cash segment
    Factor 2: + 75%# of Margin Utilised for MIS position
    Factor 3: + Unrealised loss of all open position
    Factor 4: + Realised profit of MIS position (after netting off any realised loss in Non MIS position) up to the extent of unrealised loss in MIS position
    Factor 5: - MTM (Mark-To-Market) loss of non MIS position if it is greater than utilisation of all non-MIS position.


    How it works: - Let us understand through the following examples:-
    Total margin available before creating any position is Rs. 1,65,000


    Factor 1: - Margin utilised for non-MIS position Rs. 40,000


    Factor 2: - Margin utilised for MIS position is Rs. 25,000


    Thus, the balance margin amount now stands at Rs. 1,00,000
    As of this point, the cut off value will be as follows:-


    Margin available = Rs. 1,00,000
    + 75% of margin utilised for MIS position = Rs. 18,750
    Cut off Value = Rs. 1,18,750


    Now let us, take into consideration the third factor combining the first two factors:

    Factor 3: + Unrealised loss of all open position

    In this example, let’s assume that the client has unrealised loss of Rs. 3,000 in any of the open position, then the cut off value will be calculated as follows:-


    Margin available (Rs. 1,00,000 – Rs. 3,000) = Rs. 97,000
    + 75% of margin utilised for MIS position = Rs. 18,750
    + Unrealised loss on all open positions = Rs. 3,000
    Cut off Value = Rs. 1,18,750

    Now let us, take into consideration the fourth factor combining the first two factors:


    Factor 4: + Realised profit of MIS position (after netting off any realised loss in Non-MIS position) up to the extent of unrealised loss in MIS position

    In this example, let’s assume the client has a realised profit on MIS position of Rs. 1,200 & reliased loss in Non MIS position of Rs. 200 thus after deducting realised loss in Non-MIS position the net realised profit in MIS position is of Rs. 1,000 and the unrealised loss in MIS position is of Rs. 700, then the cut off value will be calculated as follows:-

    Margin available = Rs. 1,00,000 (1,00,000 + (1,200 - 200 – 700 or 0 whichever is lower) as the realised profit benefit cannot be given due to new regulations)
    + 75% of margin utilised for MIS position = Rs. 18,750
    + Realised profit of MIS position (after netting off any realised loss in Non MIS position) up to the extent of unrealised loss in MIS position = Rs. 700
    Cut off Value = Rs. 1,19,450

    Now let us, take into consideration the fifth factor combining the first two factors:


    Factor 5: - MTM loss of non MIS position if it is greater than utilisation of all non MIS position

    In this example, let’s assume that the client has utilised Rs. 40,000 as margin for non-MIS position and MTM (unrealised loss) on Non MIS position stands at Rs. 41,000. Now, as the MTM is higher than the margin money utilised for the non-MIS position by Rs. 1,000, the same will be deducted while calculating the cut-off value as follows:-


    Margin available = (Rs. 1,00,000 – Rs. 41,000) = Rs. 59,000
    + 75% of margin utilised for MIS position = Rs. 18,750
    + Unrealised loss of all open position = Rs. 41,000
    - MTM loss of non-MIS position if it is greater that utilisation of all non-MIS position = Rs. 1,000
    Cut off Value = Rs. 1,17,750

    #subject to change without prior notice

    However, you do not worry about such detailed calculations. We have simplified the same and you can easily access your real-time Cut-Off value, including unrealised profit & loss on open positions in the Today’s positions section under the Reports Menu.
  • QWhat happens if I do not square off my MIS position by 3:20 p.m.?
    A
    In case, you do not close your positions before the stipulated deadline of 3:20 p.m., the same will be auto Squared Off by our system any time post 3:20 p.m except index options on expiry day. All pending (Open) MIS orders would also get auto cancelled
  • QHow do I place an MIS order?
    A
    Setting up an MIS order is easy. Just log in to your account on https://www.kotaksecurities.com/ and follow these steps:

    1. Click on ‘Place order’.
    2. Choose ‘Cash’, ‘Index F&O’, or ‘Stock F&O’.
    3. Select ‘Buy’ or ‘Sell’.
    4. Enter necessary details like exchange, stock/index, instrument type, no. of lots, and price.
    5. Select ‘MIS’ under ‘Order Type’.
    6. Finally, click on ‘Place order’.
  • QCan I convert my MIS positions to ‘Normal’ and vice versa?
    A
    Currently this feature is not available, however, we are planning to launch this soon.
  • QWhat happens if I do not square off my MIS position by Auto Square off time ?
    A
    In case, you do not close your MIS positions before the stipulated Auto-Square off time, then the equity portion of the MIS position will be auto squared-off by our system any time post 3:20 p.m. except in index options on expiry days; the currency portion of the MIS position will get auto squared-off any time post 4:40 p.m.; while the commodity related MIS position will be auto squared-off any time, as per the stipulated deadline (30 minutes prior to the closure of market hours). Please note, option contracts expiring on the same day won’t be auto squared off in equity derivatives.
  • QHow do I place an MIS order?
    A
    Setting up an MIS order is easy. Just log in to your account on https://www.kotaksecurities.com/ and follow these steps:

    i. Click on ‘Place order’.
    ii. Choose ‘Cash’, ‘Index F&O’, or ‘Stock F&O’, or ‘Commodity F&O’ or ‘Currency F&O’
    iii. Select ‘Buy’ or ‘Sell’.
    iv. Enter necessary details like exchange, stock/index, instrument type, no. of lots, and price.
    v. Select ‘MIS’ under ‘Order Type’.
    vi. Finally, click on ‘Place order’.
  • QWhat is the maximum position size that can be created in MIS?
    A
    The maximum position size, in terms of value, allowed for MIS trade is Rs. 5 crore for Cash & equity futures & Rs. 25 crore for equity options; Rs. 2 crore for Commodity futures and Rs. 10 Cr for Currency futures which is part of equity options exposure.
  • QCan I create a contra position via Super Multiple in the same stock where I have set up an MIS position?
    A
    Yes, you can. Super Multiple and MIS are separate product offerings, thus you can create contra positions using them. However, it may be possible that the exchange might reject orders under specific conditions.
  • QWhy did my pending MIS order get cancelled at 3:20 p.m.?
    A
    As 3:20 p.m. is the system scheduled auto square off time for all MIS positions, the system at first cancels all pending orders under MIS facility in order to avoid duplication. Also, the system will not allow creation of any fresh MIS orders after the 3:20 p.m. stipulated deadline.
  • QHow can I modify MIS orders? What all can be modified?
    A
    a. In order to modify your MIS order, go to Reports and click on Order status under Equity, Derivatives & Currency menu.
    b. Click on OPN/MODIFY button. Select Modify from the options.
    c. A pop-up screen will appear with auto-populated details of your existing order. You can modify the Quantity, Price, Stop Loss Trigger Price and Disclosed Quantity. Thereafter, click on Modify Order and Confirm.
    d. You will be shown a screen having the reference number of the order. You can also check details of this order by clicking on Order Status.
  • QHow can I square off my MIS position?
    A
    a. An easy way to Square off any open position is by clicking on Open/Today's Positions under Reports. This screen will show you details of all your open positions, including MIS. Just Select/ Click on the position you want to square off.
    b. Click on EXIT. Set the price as either Limit or Market to square off the position. Click on Square Off & Confirm.
    c. You will be shown a screen having the reference number of the order. You can also check the details of this order by clicking on Order Status.

    Note: Please note, that you can square off any open position in MIS from Today’s/Open Positions. In case you place orders by not marking order type as MIS then it will be considered a fresh order and hence it would not be considered as a square off of your open MIS position. Hence, for Square Off do ensure that you select MIS as Order Type.
  • QCan an MIS position be squared off as a Normal order?
    A
    No, an MIS position cannot be squared off by placing a Normal order. This will result into creation of a fresh position.
  • QHow can I see the margin utilised in MIS at position level?
    A
    You can check the margin utilised for MIS trades on the Open Position page under Reports menu.
  • QIf a fresh sell order is placed in a scrip/contract where there is already a buy position, will it be allowed and treated as the square off leg? Or is it mandatory to place the square off order from the existing position?
    A
    A contra order placed using MIS for the open position in MIS will be considered as the square off order. However, you can possibly create a contra order by using another facility (non MIS) as Order Type.
  • QUnder which circumstances will my MIS order be rejected?
    A
    Your MIS order may be rejected if:

    a. There is insufficient margin to place an MIS order
    b. The script/contract is not allowed in MIS
  • QCan I square off an MIS position at market price?
    A
    Absolutely! You can place square off orders at either limit or market price.
  • QCan I modify an unexecuted Limit square off order in MIS to Market order?
    A
    Definitely! You can modify an unexecuted Limit square off order in MIS to Market order
  • QIs there a maximum allowable quantity for MIS similar to a Super Multiple order?
    A
    The maximum allowable quantity for an MIS order is dynamic in nature. The maximum allowable order quantity can be less than or equal to the best 5 buyers/sellers bids on the exchange at the time of placing the order or the maximum allowable quantity set by the exchange for a given scrip, whichever is lower.
  • QWhat is the maximum position size that can be created in MIS?
    A
    The maximum position size, in terms of value, allowed for MIS trade is Rs. 5 Crs. for Cash & Futures & Rs. 25 Crs. for Options
  • QHow is exposure calculated when I buy and sell Options contracts?
    A
    a. In case you buy an Options contract, no exposure is given. As such, you need to pay the full premium amount.

    b. In case you Sell an Options contract, you can get exposure.
  • QCan change in the valuation of securities during the day also change the cut-off level in MIS?
    A
    Yes, change in the valuation of securities will change the cut-off level in MIS. Any unrealised gain or loss will have a corresponding effect on the cut-off level in MIS.
  • QHow does squaring off work in MIS trading?
    A
    The following illustrations will help you understand how Squaring Off works in MIS.

    Example 1—You have utilised the full margin in MIS positions:

    Available Margin: Rs. 5,00,000
    Margin Utilised for MIS: Rs. 5,00,000

    • Cash: Rs. 1,00,000
    • Futures: Rs. 2,00,000
    • Options: Rs. 2,00,000

    Balance Margin: 0
    Cut-off: Rs. 2,50,000 - i.e. 50% * of Rs. 5,00,000
    Your position will get squared off when the MIS unrealised loss breaches Rs. 2,50,000.


    Example 2—You have utilised a part of the margin for MIS positions:

    Available Margin: Rs. 5,00,000
    Margin Utilised for MIS: Rs. 2,00,000

    • Futures: Rs. 2,00,000

    Balance Margin: Rs. 3,00,000
    Cut-off: Rs. 4,00,000 - i.e. (50% * of Rs. 2,00,000) + balance margin Rs. 3,00,000
    Your position will get squared off when the MIS unrealised loss breaches Rs. 4,00,000.

    Example 3—You have utilised a part of the margin in MIS positions and a part in non-MIS positions:

    Available Margin: Rs. 5,00,000
    Margin Utilised for MIS: Rs. 2,00,000
    Margin Utilised in Non-MIS: Rs. 1,00,000

    Balance Margin: Rs. 2,00,000
    Cut-off (Assuming loss in non - MIS position is of less than Rs. 1,00,000): Rs. 3,00,000 - i.e. (50% * Rs. 2,00,000) + balance margin Rs. 2,00,000
    Your position will get squared off when the MIS unrealised loss breaches Rs. 3,00,000.
  • QWhat can be the different scenarios if I create Buy option positions in MIS?
    A
    Scenario 1:-
    Buy Options & complete margin utilised for buying options using MIS :-
    Available Margin: Rs. 50,000
    Margin utilised in Option Premium paid: Rs. 50,000

    • Buy Options Premium paid : Rs. 50,000

    Balance Margin: 0
    Cut-off: N/A
    Your position will get squared off at 3:20 p.m. as you have chosen order type as MIS while creating position

    Scenario 2:-
    Buy Options in MIS & MIS cash/futures position is created in (some other underlying in case of futures) with the balance margin:-
    Available Margin: Rs. 1,00,000
    Margin utilised in Option premium paid: Rs. 30,000
    Margin Utilised in MIS: Rs. 70,000

    • Cash/Futures : Rs. 70,000

    Balance Margin: 0
    Cut-off: 52,500 (75% * 70,000)
    Your all MIS positions i.e. Buy options & Cash/Futures will get squared off when MIS unrealised loss breaches Rs.52,500.
    MIS unrealised loss in the above scenario will only be calculated of Cash/Futures positions. However, the positions will be squared off of even the buy options position.

    Scenario 3:-
    Hedged position in MIS with Options buy is created with the balance margin:-
    Available Margin: Rs. 1,00,000
    Margin utilised in Option premium paid: Rs. 30,000
    Margin Utilised in MIS: Rs. 20,000

    • Hedge Position Margin (Hedged Futures in same underlying as Options) :- Rs. 20,000

    Balance Margin: Rs. 50,000

    Cut-off:- Rs. 65,000 (Rs. 50,000 + (75% * Rs. 20,000))
    Your all MIS positions i.e. Buy options & Futures will get squared off when MIS unrealised loss breaches Rs.65,000.
    MIS unrealised loss in the above scenario will only be calculated of Futures positions. However, the positions will be squared off of even the buy options position.
    The above are the basic scenarios for options, however you may create different types of scenario.
  • QCan I use additional stock margins as per the new system in all products?
    A
    No, these additional stock margins are only applicable in Margin Intraday Square Off orders in Equity cash, Futures and Options
  • QWhat if I only have those stocks where K-Sec provides 80% margin?
    A
    In case you only have stocks where K-Sec provides 80% margin, you will not get any additional margins as per the new system.
  • QWill my MIS cut-off value change with the additional margin?
    A
    No, the MIS cut-off will not change. The calculation for MIS cut-off remains as per the previous system and it is calculated as per the Kotak Securities Limited (KSL) risk management.
  • QI have additional margin but I cannot place Margin Intraday Square-Off (MIS) trades
    A
    MIS trades can be placed only if you have normal margins (cash or stocks where K-Sec provides 80% margin) along with the additional margins. Only basis additional margin you cannot create MIS positions.
  • QHow did my position get squared-off almost instantly?
    A
    This is possible if you have extremely low normal margin and high additional margin which is utilised for taking the MIS position as the cut-off will be based on the normal margin.
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