Today, my Intraday Short Strangle trade was missed even though I had sufficient funds available.
My allocated capital is ₹2,50,000. I checked the Trade Log, where the margin required was ₹2,00,107 and the allocation was mentioned as 80/100.
Since I had ₹2.5 lakh allocated and the margin required was around ₹2 lakh, could someone explain why the trade was skipped even though sufficient funds were available?
I would like to clarify that when an Algo generates an entry signal, it performs risk checks based on the prevailing market conditions. Based on these checks, a certain percentage of the allocated capital is assigned to the trade.
For example:
Higher-risk market conditions → allocation may be around 20–50%
Lower-risk conditions → allocation may be around 60–90%
Depending on the risk assessment, the Algo can also allocate 100%
In this case, the Algo assigned 80% of the allocated capital for the trade.
So:
₹2,50,000 × 80% = ₹2,00,000
The margin required to execute one lot was ₹2,00,107, which was slightly higher than the ₹2,00,000 available for this trade based on the Algo’s allocation. Therefore, the trade was skipped.
It is also important to note that the margin required is calculated based on the applicable SPAN and Exposure margin requirements, which can vary depending on market conditions and the position.
You can easily check how much capital was utilised for a particular trade from the Past Trades section on the Stratzy application.
Select the Algo you want to check.
Go to the Past Trades section.
Scroll down to the Signal tab; you will see the capital utilisation, for example: “Capital utilised: 80% of allocation.”
Click on Signal 1 to view the detailed trade summary.
The detailed summary provides:
Margin Required: Margin required for the trade
Capital Allocated to Trade: Percentage of allocation used for the trade
Returns: Effective Profit and Loss along with PnL% based on Maximum allocation
Signal Cycle: Entry and exit time of the trade
Signal Breakup: Instruments traded along with their entry and exit prices
Please note that the capital allocated shown in the trade summary is based on the Algo’s Maximum Allocation. This helps you understand how the trade-specific capital utilisation was determined and how it relates to the margin required for the trade.
Please refer to the screenshots below to get a better understanding.
I hope this provides some clarity.
