Bought Out Dealings
(i) Companies may place its equity intended to be offered to the public with a sponsor member at a mutually agreed price through the Concept of Bought Out Deal,
(ii) Thus after buying out the total equity, sponsor member would sell the shares of the company to the public through “offer for sale”,
(iii) It ensures faster availability of funds to the company for timely completion of its projects and also a listed status on a later date.
In certain segment, Value at Risk (VaR) based margining approach has been adopted. In the VaR system of margining, historical volatilities of scrips and overall market volatility is considered to arrive at a VaR margin percentage for a scrip.
VAR Margin is in principle same as Gross Exposure Margin
Gross Exposure Margin:
(On Securities-Wise Outstanding Position)
Gross exposure margin is computed on the aggregate of the net cumulative outstanding positions (purchases or sales) in each security.
(Changes from exchange to exchange)
Each Exchange determines its own rates of Gross Exposure Margin and Additional Volatility Margin based on its own risk perception of the market and other risk containment measures such as deposits and collaterals in its possession.
Net Outstanding Position at day end.
Average Volatility of Past 6 months
GEM collected for 2 days as per volatility
10,000 x 800 x 1% x 2 = 1,60,000
20,000 x 700 x 0.5% x 2 = 1,40,000
30,000 x 900 x 0.75 % x 2 = 4,05,000
Table didnt come properly in above post so explaining one point
Script Name — Reliance
Net Outstanding Position at day end.– Short 10,000
Closing Price 800
Average Volatility of Past 6 months — 1 %
GEM collected for 2 days as per volatility 10,000 x 800 x 1% x 2 = 1,60,000