Know Everything About Margin Trading

MARGIN TRADING
FEW USEFUL TRICKS AND TIPS

WHAT IS MARGIN TRADING?
Margin Trading is process where an
individual investor can buy more stocks
than he can afford.
It involves buying and selling of securities
in one session
The widespread popularity of online
market trading has also made it evident
for the users to opt for margin trading
Margin Trading offers leverage and can
be considered as a high risk strategy,
which can offer huge gains but also can
lead to heavy losses.

LEVERAGE OF MARGIN TRADING
Margin trading allows you to buy
stock in bulk despite not having
sufficient funds by borrowing them
from the broker.
You have to pay an Initial Margin i.e
small amount of total value of shares.
It can be settled when you square of
the position.
The benefit of margin trading is that
you can take advantage of current
market scenario without letting the
opportunity go.

MINIMUM MARGIN & RISK
MANAGEMENT
Margin paid differs from broker to broker.
Basic requirement for margin trading is to have an account with a
margin trading facility with your broker.
You have to maintain minimum margin throughout in your account.
Traders must also carefully pick their deals because the loss is just as
much amplified as the profit.
Taking guidance from a qualified financial advisor is also a good
idea in this regard.

SUFFICIENT LIQUIDITY
Brokers have to ensure
maintenance of the margin when it
is being availed of by the client.
In case of short fall, brokers would
have to make necessary margin
calls.
For an investor, availability of surplus
liquid funds to meet up such margin
calls is also a necessity.