Can trading charges create a negative account balance?

Yes, this is one of the more common and underappreciated ways a negative balance happens. If you place a trade using nearly all your available funds, the trade itself might execute fine, but the associated charges, brokerage, STT, GST, exchange fees, and DP charges on a sell, get deducted afterward and can push the account below zero if there wasn’t a buffer set aside for them. This is especially likely with frequent intraday or F&O trading, where charges accumulate across many trades in a single day and can add up to a meaningful amount relative to a tightly-utilised account. You now leave a small buffer of unused funds rather than deploying 100% of your available balance into a single trade, specifically to avoid this scenario, since a negative balance can trigger restrictions on placing new orders until it’s cleared.