Looking for a chance to make cash via stocks but aren’t carrying enough cash. It would help if you had a margin trading facility. This type of facility allows you to purchase stocks by paying only a small portion of their entire value. It’s the same as borrowing cash to make a small investment. By using MTF you will easily be able to make some trades with more than your usual buying power. It’s almost the same as getting yourself a boost, even if you don’t get all the cash directly.
What are the benefits of margin trading?
Margin trading allows you to improve the whole percentage return of the capital that is deployed with the least allocation.
Boosts Purchasing Power
Having a margin trading facility will also boost percentage returns on capital using a minimum allocation.
Allows short-term gains
In other words, it is perfect for traders who want some short term gains.
Leverages on stocks
Utilizes securities that are available within demat accounts
As per SEBI corporate brokers can only offer MTF to their clients. Those who have securities under MTF will be pre-defined by SEBI alongside other exchanges, which are modified from time to time.
Betting on greater trades
MTF also gives you the permission to bet on trades that are much bigger compared to what you would expect from funds that are available since you will easily be able to leverage the position by 4X using the borrowed amount. Also, using this limit depends on the kind of asset which is being traded and the value of the trade itself
Higher profits are available
With MTF you can also end up purchasing a lot more shares since more profits will be provided depending on whether the trading goes right as per the determined trend and analysis.
SEBI will also closely monitor this, and it will also use frames that will amend all the rules of interest for your traders.
What risks come with margin trading?
You need to have a minimum balance within the demat account at all times. If the balance is less than the minimum, you will be asked to keep sufficient balance. So, if you are unable got do so, you will be forced to sell off some of the shares in order to keep your balance
If you can’t keep up with the agreement, then you will have to initiate action by simply liquidating all the assets to recover the lost amount.
How does the margin trading facility work when you purchase stocks?
The online margin calculator also provides you with all the best margin for all the tradable securities offered by us. Our tools available on the share market app will allow you to make smarter decisions when it comes to estimating the stock margins and leveraging trading before you invest or trade in real time. Using our calculator will give you a good hang of all the services you need before you begin trading or investing with us.