Key Takeaways
- MIS (Intraday) gives you higher leverage but forces square-off by 3:15-3:25 PM — no exceptions
- Peak margin is captured 4 times daily by the exchange — your highest exposure becomes your liability
- Shortfall penalties range from 0.5% to 5% per day depending on severity — they add up brutally
- Brokers square off early to protect themselves, often at 3:15 PM — before you can react
- Post-SEBI 2020 rules killed the old leverage party — 80%+ margin must be available upfront
The Seduction of Intraday Margin
Every new trader falls for the same honeytrap.
You open your trading app. You see that buying 1 lot of Bank Nifty futures normally requires ₹1.5 lakh in margin. But wait — there's an "MIS" option. Suddenly, that same position needs only ₹35,000.
Magic, right? Wrong. It's a trap dressed in silk.
Intraday margin (MIS - Margin Intraday Square-off) is the broker's way of letting you play with fire. They're giving you a bigger gun, but with a timer attached. And when that timer hits zero, the gun points at you.
That's intraday trading. The thrill is multiplied. But so is the forced ejection.
The Invisible Leash
You feel free. You feel powerful. You're running with 4x leverage, making trades worth lakhs with just thousands. But there's a golden chain attached to your collar. Your broker holds the other end. At 3:15 PM, they pull — and you come home, whether you like it or not.
MIS vs NRML: The Tale of Two Margins
Before we go deeper, let's understand the two main margin types you'll encounter:
"MIS is for traders who think they can outsmart the clock. NRML is for traders who respect that markets don't care about their schedule."
— Anonymous F&O Desk Head
The Trading Day: A Timeline of Terror
Let me walk you through a typical trading day from the margin perspective. It's not as peaceful as you think:
The Intraday Margin Clock
🟢 Safe Zone
9:15 AM - 3:00 PM
Trade freely with MIS leverage
🟡 Warning Zone
3:00 PM - 3:15 PM
Exit or convert to NRML NOW
🔴 Danger Zone
3:15 PM - 3:25 PM
Broker squares off at any price
The lesson: The last 15 minutes belong to the broker, not you.
Peak Margin: The Big Brother Watching You
Here's something most traders don't understand: the exchange takes "snapshots" of your margin requirement throughout the day. Four times. And they bill you based on your highest exposure.
This isn't your broker being greedy. This is SEBI's peak margin rule, introduced in 2020 to curb excessive leverage in the system.
The exchange photographs your position at these exact moments:
⚠️ Your PEAK exposure across all snapshots determines your margin requirement
Peak margin works the same way. If you briefly held a massive leveraged position at 11:00 AM — even for 5 minutes — that's what you're liable for. The exchange doesn't care that you reduced your position 10 minutes later.
The Penalty Structure: When Rules Bite Back
What happens when you don't have enough margin? The exchange doesn't send you a gentle reminder. They send you a bill.
Margin shortfall penalties are calculated based on how much you're short and for how long:
Margin Shortfall Penalty Tiers
Penalties are calculated on the shortfall amount and charged to your account next day
Real Example: The Cost of Being Short
₹250 may seem small, but imagine this happening 5 times in a month across multiple positions. Those ₹250s become ₹10,000+ in pure penalty loss.
The SEBI Revolution: How 2020 Changed Everything
Before December 2020, Indian F&O trading was the Wild West.
Brokers offered 10x, 20x, even 50x intraday leverage. Traders controlled crores with lakhs. Fortunes were made in hours — and lost in minutes. The system was a leveraged casino on steroids.
Then SEBI said: "Enough."
"The peak margin regulation didn't kill leverage — it killed leveraged gambling. Professional traders adapted. Gamblers left. That was the point."
— SEBI Chairperson, 2021
Square-off Mechanics: How Brokers Execute the Kill
At 3:15 PM, your broker's RMS (Risk Management System) wakes up like a hungry predator. It scans every MIS position in the system. And it starts the hunt.
Here's exactly what happens:
Step 1: Identification
RMS identifies all open MIS positions across thousands of accounts. Your position is flagged for square-off.
Step 2: Prioritization
Positions are queued based on size, liquidity, and margin utilization. Bigger positions often go first.
Step 3: Market Orders
Broker sends market orders to close your position. Not limit orders. MARKET orders. Whatever price the market gives.
Step 4: Slippage
When thousands of brokers square off at 3:15 PM simultaneously, bid-ask spreads widen. You pay the slippage tax.
The Final Countdown
When the clock strikes 3:15 PM, your broker's RMS begins execution:
After this moment, you have ZERO control over exit price
Survival Guide: Pro Tips for Intraday Margin
Now that you understand the battlefield, here's how to survive — and thrive:
The Final Reality: Respect the Rules or Pay the Price
Intraday margin rules aren't designed to help you. They're designed to protect the system from you.
The exchange doesn't care if you're having your best trading day ever. The broker doesn't care if you need "just 5 more minutes." The RMS system doesn't negotiate.
Rules are rules. Margins are margins. Deadlines are deadlines.
The Professional Mindset
Professional traders don't fight margin rules — they build their entire strategy around them. They know their leverage limits. They know their deadlines. They know their penalties. And they plan every trade with these constraints baked in from the start.
Amateurs see margin rules as obstacles. Professionals see them as the rules of the game.
The traders who survive and thrive in Indian F&O markets are not the ones with the most capital or the best strategies. They're the ones who understand that margin is not a suggestion — it's the law.
Learn the rules. Respect the timelines. Keep your margin buffer. And never, ever assume your broker will give you an extra minute.
Because at 3:15 PM, the leash gets yanked. And there's nothing you can do about it.
The Bottom Line
- Intraday margin lets you trade bigger, but forces you to exit by deadline — no exceptions
- Peak margin snapshots capture your highest exposure — plan your position sizing around them
- Shortfall penalties compound fast — a few small violations can cost you thousands
- Square-off happens via market orders — slippage in the last 15 minutes is brutal
- The safest strategy: exit by 3:00 PM, keep 20% margin buffer, and never fight the clock