How are Stop Orders Margined on Delta Exchange?
When an order is placed on Delta Exchange, margin is blocked for it. This is known as order margin. This means that a trader needs to have sufficient balance in his account to provide margin for an order. In case a trader wishes to place multiple orders, the order margin requirement will be higher, albeit margin offsetting is provided to ensure greater capital efficiency for traders.
The exception to this rule is stop orders. While placing a Stop Order, NO order margin is blocked. A trader can place multiple stop orders at no additional margin from their account. This helps traders keep multiple stop orders open without having to worry about margin.
Stop orders are conditional orders which result in a market or limit order being sent to the matching engine once the trigger condition has been met. Keeping this nature of stop orders in mind, we look for margin for stop orders only after they have been triggered.
Nevertheless, once the trigger price has been hit, margin is then required for the order. At this point, traders need to ensure they have sufficient balance in their account for the order to be placed. In case, the trader does not have sufficient balance in their account, the stop orders are CANCELLED. Many times traders use their entire capital in a single trade without keeping some balance left. During such instances, if by chance, their trigger price has been hit, the stop order will not be placed.