The exchange charges for margins in the equity and derivatives segments to cover for probable risk due to fluctuation in price. Below are the margins levied by the exchange for different segments.

EquityEquity derivativesCurrency derivativesCommodity derivatives
VaR marginSpan marginInitial marginInitial margin
Extreme loss marginExtreme loss margin
Extreme loss margin
Extreme loss margin
Additional marginMargin on crystallised obligationMargin on crystallised obligation
Additional margin

Physical delivery margin
Delivery margin

At Kotak Securities, we accept margin in the form of cash or stock collaterals. When you trade and carry-forward a position on overnight basis you are supposed to maintain sufficient margin in your account. All stock brokers have to inform the exchange about the margin available in the client's account against the margin required. This is a daily process and is known as Margin Reporting. Let's say for or a client's account if,

Margin available >= Margin required: No margin penalty levied

Margin available < Margin required: Margin penalty levied

In the second case, the margin penalty will be levied on the shortfall of margin. This will reflect in your ledger as a margin penalty for the respective position.