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Friends! How do you buy more stocks in less funds ?We will see information about Margin Trading meaning (Funds or leverage).Using Margin Trading Facility or Leverage, you can buy and sell large amounts of shares even in small funds. Margin trading funds – Money in the bank 2021.
Each stock broker offers a certain amount of margin funds to attract its clients.Most of the brokers offer margin or leverage only for intraday trading.
And there are few stock brokers who give use margin trading fund or leverage for position as well as swing trading.
No brokers gives leverage for long term investing.The margin varies on each stock.
Generally, good and huge companies have higher margin funds on their stock.Whenever the margin on the shares of small companies is less.
stock broker to decide how much margin to give customer to trade in specific stock.
Margin funds should be used for equity delivery.its better uses the margin funds.
full service broker provide large amount of margin more than a discount stock broker.
We will discuss with India’s no 1 full service stock broker angel broking in detail with the example of Margin Funds.
If you wish you had some more funds to trade with, then margin trading funds for.You can place order with a minimum requirement margin and the rest will be funded by angel broking very similar to a short term loan facility.
It is simple and very convenient offer for you angel broking provide Upto 4X limit to expand your investment horizons.
The margin funds have some charges to pay.Excitingly interest rates just 0.049% per day and interest free for first two days.
Margin trading funds -How it work?
Suppose, Your ledger minium balance Rs.25000.But you want to stock more than.then you can buy more stock with help of margin funds.
When you choose margin trading while you buy stock.Your buying capacity with trading facility Rs.100,000.
It charge have 0.049%per day.let’s calculate the charges for additional funds utilization per day.
Rs 75000 X 0.049 = 36.75 rs per day.
Margin trading is not useful for long terms investment.
It is only Useful for BTST Trading.
The full form of BTST Buy Today Sell Tomorrow.We can take our shares today and sell them tomorrow.
Why do brokers do this offer ?
Every stock broker is taking some brokerage from the customer.This applies to every sell transaction of stock.Different types of brokerage have to be pay on various segment.
For margin trading example Equity delivery trading is free and intraday trading charges are Rs.F and O segment trading brokerage Rs40 on every transaction.
Brokerage depends on the size of the transaction.
As seen in the example above, You Brought the stock Rs.100,000.
In which 25000 rupees are yours.The remaining Rs 75,000 was give to you by the stock broker from Margin Funds.
There are no charges for 2 days.
Then interest is charged at 0.049 per cent per day.
Also, when you sell this stock, you have to pay all the brokerage and charges.
Brokerage like that, The charges for each full service broker and discount broker are different.
|Broker||Mimimum Brokerage||Account Opening Fee||Brokerage ( Equity Delivery)|
|Angel Broking||Equity Rs 20 | F&O Rs 30||Free||Free|
|ICICI Direct||Rs 35 per trade (I-Secure Plan)||Free||0.55%|
|HDFC Securities||Rs 25 plus taxes||Rs.999||0.50%|
|Kotak Securities||Rs 21 per executed order||Rs.750||0.49%|
|Sharekhan||Intraday: 5 paisa per share | Delivery: 10 paisa per share | Future Rs 0.001 per share||Free||0.50%|
|Motilal Oswal||Rs 25 for Delivery and Rs 12 for Intraday||Free||0.50%|
|AxisDirect||Rs 20 per trade||Rs.900||0.50%|
|SBI Securities||Rs 0.05 for Cash, Rs 0.01 Future||Rs.850||0.50%|
|Geojit||1p per share or Rs 20/contract whichever is higher||Rs.425||0.30%|
|Edelweiss||0.03% Equity delivery, 0.01% Intra-day and Futures||Free||Rs 10 per executed order|
|Broker||Minimum Brokerage||Account Opening Fee||Brokerage(Equity Delivery)|
|Zerodha||Rs 20 or 0.03% (whichever is lower) per trade||Rs.200 On Equity |
Rs.300 Equity + F and O
|Upstock||Rs. 20 per executed order or 0.05% (whichever is lower)||Free||Zero Brokerage|
Margin Trading is Good Or Bad?
Margin trading tips : There is a lot of risk on all types of trading in the stock market.It is not possible to say which stock will perform.
In such a situation, it is very risky to take out a loan from someone and trade.
Margin funds are also a loan.
So take this risk with look at your risk reward ratio.
Suppose, you bought shares Rs.100,000.
In which you have 25000 rupees.And Rs 75000 of stock broker.
This is very profit if your trade is right.At the same time there was a lot of loss if your trade is missed.
Therefore, on the use of Margin Fund.It doesn’t matter if it’s good or bad.
How to use margin trading funds effectively?
- Find out Breakout stock.
- Target holding your position for one day and maximum for one week.
- Book profit in stocks moves by 5%
- Keep tight your stop loss, should not be grearter than 2 % from entry level.
- Ask your stock broker all the doubts about Margin funds.
Which broker provides the highest margin fund?
Angel Broking is full service broker to provide highest ammount of margin funds or leverage.
What happened when you lose margin money?
You will have to pay all the money (you lose ) to the stock broker.