Margin Shortfall
What happens in case of a margin shortfall?
The Holding Coverage Ratio helps track your MTF risk. If this ratio drops below 20%, your stocks may be auto squared off to prevent further loss.
Formula:
Holding Coverage = (Combined Ledger + Total Stock Value) ÷ Total Stock Value × 100
🔹 Scenario 1: You have ₹10,000 cash
- Bought stocks worth ₹40,000 using 4X leverage
- ₹10,000 (your funds) + ₹30,000 (borrowed)
- Stock value drops to ₹37,000
- Combined Ledger: –₹30,000
- Holding Coverage = (–30,000 + 37,000) / 37,000 = 18.92%
- Since coverage is below 20%, stocks will be auto-sold to recover the shortfall.
🔹 Scenario 2: You have ₹13,000 cash
- Bought stocks worth ₹40,000 (₹10,000 used, ₹3,000 cash left)
- Stock value drops to ₹37,000 (₹3,000 MTM loss adjusts from cash)
- Combined Ledger: –₹27,000
- Holding Coverage = (–27,000 + 37,000) / 37,000 = 27.03%
- Coverage is above 20%, so no auto-square off.
📌 Notes:
- Combined Ledger = Normal + MTF ledger
- Total Stock Value includes pledged stocks, MTF funding, CUSPA, and BTST holdings
- If DDPI is enabled, normal holdings are also included in the stock value

