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Does peak margin penalty apply on BTST?

Yes, there can be a peak margin penalty in BTST trade, if the ad-hoc margin for that particular stock is increased by the exchange. BTST trade means buying something today and selling the same next day or the day after tomorrow before the settlement of shares.

Suppose the Adhoc margin is increased in the stock you purchased because of volatility or some other reasons, so the exchange will start blocking extra funds if you sell the share on BTST basis. If you don’t have sufficient margin at that time in your available funds, this might lead to a penalty. You can check the list of stocks here on the Zerodha website, which might cause a BTST penalty because of increased Ad-hoc margin.

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