What Happens to MTF Positions During a Market Crash or Extreme Volatility?
During a market crash or periods of extreme volatility, our Risk team may square off your MTF positions if the mark-to-market (MTM) loss reaches or exceeds 80% of your initial margin. This square-off can be executed without prior notice in order to contain risk and protect against further losses.
This safeguard is part of FYERS’ risk management framework to maintain trading stability and ensure margin requirements are met under volatile conditions. It applies to all open MTF positions, regardless of the stock involved.
Warning: Forced square-off during a market crash can occur suddenly and at available market prices. Always maintain sufficient margin buffers to reduce the risk of liquidation.
What Should I Do as an MTF Trader?
- Regularly monitor your MTM exposure and available margin in the Funds section of the FYERS platform.
- Maintain sufficient free balance to cushion against sharp price moves and avoid forced square-offs.
- You may receive alerts via email, WhatsApp, or in-app notifications as your margin levels drop, but square-off can still occur without prior warning. Learn more in Will I Be Notified About a Margin Call for Any Shortfall?.
What Happens After Square-Off?
- The loss is adjusted against your trading account balance.
- Any unpaid shortfall may reflect as a negative balance in your ledger.
- Additional interest may apply if the shortfall remains unpaid.
To understand how insufficient funds and shortfalls can trigger liquidation, see What Are the Consequences of Not Maintaining Sufficient Funds for MTF Positions?.
What If...
| Scenario | What You Should Know |
|---|
| You add funds before the 80% MTM breach | Your position may be retained, but the Risk team may still act depending on overall exposure and stock movement. |
| The stock gaps down suddenly | In extreme gap-downs, MTM can breach limits instantly, leading to square-off at the next available price. Use stop-losses and maintain extra margins during volatility. |
| You need help reviewing a forced square-off | Contact our support team with trade and ledger details for clarification. |
Last updated: 02 Sep 2025
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