NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Risk Management
Which of the following best describes a 'peak margin' obligation applicable to clients in the equity segment under SEBI's framework?
Peak margin is the highest margin requirement among the intraday snapshots taken by the clearing corporation during the trading day. Clients must have this margin in place, so intraday exposure is covered rather than just closing positions.
- AMargin collected only at the end of the trading day based on closing positions
- BMargin that the client must have at the highest of the intraday snapshots of margin requirement taken by the clearing corporationCorrect
- CMargin collected only on the first trade of the month
- DMargin equal to the total brokerage paid in the previous quarter
Explanation
Clearing corporations take multiple snapshots of positions during the day, and the highest margin requirement across them is the peak margin that must be collected from the client. End-of-day only margining would miss intraday exposure. The other options are unrelated to margin computation.
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