What is Margin?
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Money used from a brokerage firm to buy an investment is known as a Margin. Margin is the difference between the total value of securities held in an investor’s Demat account and the loan amount from the broker.
The broker acts as a lender and the securities in the investor’s account act as collateral.
If you are borrowing money to buy shares, then you are using margin
Why is Margin important?
Margin allows investors to make investments with their stockbroker’s money. They act as leverage and will increase gains.
However, margin can also increase losses, and in some cases, a brokerage firm can sell an investor’s securities without informing or even sue if the investor does not fulfill a margin call.
For these reasons, margin accounts are generally for more complex investors who understand and can handle the risks involved.
How to use Zerodha Margin Calculator?
Zerodha Margin Calculator is a tool that will help you to calculate the leverage provided by Zerodha Trading Platform for the segments like Intraday, Delivery, F&O, Currency & Commodity. Margin used by Zerodha can be calculated easily using this tool.
You will be able to calculate margin Zerodha funding & the total amount of extra shares that can be bought with the extra leverage provided by the stockbroker.
Zerodha’s version of the margin calculator allows you to check all kinds of scrips along with the credentials like span margin, expiry date, etc. You can also know the different Order types in Zerodha Kite Application
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Zerodha Equity Margin
Zerodha Intraday Margin
Zerodha Equity is bought and sold for a single day before the stock market closes. Zerodha Intraday MIS provides up to 20 times margin based on the stocks you trade-in.
Equity Delivery Margin
While trading with equity delivery in Zerodha Demat Account, you can simply choose the Cash and Carry (CNC). The stocks will be delivered to your trading account and if you are selling, it gets debited. The brokerage charged in CNC is zero and you get a margin of 1X.
The benefit of using cash and carry CNC is that even if the stock price falls, you can convert your intraday position to CNC so that your risks are reduced and you do not get losses.
How to use the Zerodha Margin calculator for Equity trading?
To calculate the Zerodha equity margin for intraday trading, you need to open the official Zerodha Margin Calculator page. You need to select the Equity option. You will find around 450 stocks listed under equity. Then you will be able to view the Zerodha intraday margin beside each stock.
To check the leverage of a particular stock, you can type the name of that stock in the search box and you will be able to view its leverage under MIS.
You need to click on the Calculate option to know the exact margin based on your cash availability and the stock price.
After clicking on Calculate, a calculator window will pop-up for that particular stock. You need to fill in the cash available amount and the stock price and then click on Go.
You will now be able to view the exact number of your selected stock that can be purchased at the cash available and the stock price entered by you.
In the calculator window, there is a CNC section where the number under it means the number of stocks that can be purchased as delivery with your entered cash available amount. If the stock price appears to increase, you may earn great profits.
Zerodha Equity Futures Margin
For Equity Future Intraday in Zerodha, the margin goes up to 2.5 times which is 40% leverage depending on the stock you are trading in.
If the equity future position is closed by Zerodha, the stock is transferred to the next trading day. This transfer happens with zero brokerage charges and provides 1x leverage.
How to use Zerodha Margin Calculator for Equity Futures
The Zerodha Futures Margin can be calculated by choosing equity futures on the Zerodha margin calculator.
You will find the list of various stocks provided by Zerodha under the equity futures section along with their expiry date, lot size, NRML margin, MIS margin, and MWPL (market-wide position limits) percentage.
You can either select the stocks listed or simply type and search the name of the stock to know the margin.
You will see the NRML margin, the MIS margin as well as the MWPL % of the stock. You may also calculate the exact margin as per the cash available.
Zerodha F&O Margin
The Zerodha F&O margin is similar to Equity Future Intraday with up to 40% Zerodha leverage and carries forward to the next trading day if Zerodha team closes the position with 10% Zerodha leverage.
According to the new SEBI rule, every stockbroker needs to collect a total margin which is Span + Exposure after each trading day.
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How to use Zerodha Margin Calculator for F&O
To calculate Zerodha F&O Margin, You need to visit the margin calculator web page of Zerodha and click on F&O on the top
You can see the option Exchange to select either of NFO, MCX, and CDS as you desire. You need to select the product which is futures or options as per your need.
Under symbol, write the name of the stock whose margin you wish to find Finally, fill in the required quantity under net quantity and click on Add.
The margin shown above applies to CNC. You can purchase the given quantity of stock in the calculated margin amount as NRML order
Zerodha Commodity Margin
Commodity Future Margin
In Commodity Future Intraday Trading, Zerodha provides 40% of leverage and 2.5X span.
Alike Equity futures and F&O, When the market closes the position of the client is not locked manually. The total amount gets carried forward to the next trading day with zero brokerage and 1X span.
Commodity Option Margin
Intraday trading of Commodity Option gives 40% leverage and 2.5X span. Once the market is closed, the position of clients doesn’t lock manually and Zerodha stops.
The total amount is carried forward to the next trading day with 1X span leverage provided by the stockbroker.
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How to use Zerodha Margin Calculator for Commodity
To calculate the Zerodha Margin for a commodity, You need to select a stock from the list or search for a commodity of your choice to know its leverage.
The Zerodha Commodity Margin is available as per the lot size which is equal to 1 quantity. If the lot size is 1700 then, 1 quantity of that stock included 1700 lots.
You can further calculate the exact Zerodha commodity margin by customizing the cash available and the price as per your needs. Just click on the calculate option and the end of the column.
The calculated number denotes the total number of stocks that can be bought at the given cash and stock price. This number is available for NRML as well as CNC orders
Zerodha Currency Margin
Currency Future Margin
In currency futures, the margin provided by zerodha is up to 40% leverage depending on the stock and its market value.
If the currency futures position is closed by the Zerodha team by itself, it is transferred for the next trading day with no extra brokerage charge and leverage of 1X is given.
Currency Option Margin
In currency options, the margin provided by Zerodha is about 40% leverage depending upon the market future value.
The Zerodha team closes the currency option stop position by itself with the transaction being carried forward to the next trading day with zero brokerage charge and 1X leverage.
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How to use Zerodha Margin Calculator for Currency
To calculate the Zerodha Margin for currency, You need to visit the online page on the Zerodha margin calculator, select the currency option from the top and you shall be able to view the NRML and the MIS margin along with the expiry date, lot size, and the current price of each stock.
You can customize your search by clicking on calculate where you need to fill the cash available and the price for a particular stock.
Zerodha BO & CO Margin
Placing an order as Zerodha Bracket Order or Cover Order allows you to set a stop loss for your executed trade.
Zerodha Margin calculator provides a BO & CO margin of about 6-20 times. In Zerodha, you can manually close the position for MIS/BO/CO orders but in case you forget to do so, the transaction gets converted to carry forward cash on its own.
It is recommended to be ready with cash or the Zerodha team will close the position without any margin call, simply with Manual Square off.
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How to use Zerodha Margin Calculator for BO & CO
To calculate the Zerodha margin on BO and CO, you need to visit the margin calculator page of Zerodha and select BO & CO from the top. Now, you need to scroll down and under segment choose NFO, MCX or CDS as per your need.
Under the symbol, you need to select the stock whose margin you wish to calculate and enter the quantity you require then enter the stop-loss amount and click on “calculate”.
Once you click on calculate, a box will appear showing the actual value, the margin required and the leverage of that particular stock
The actual value shows the actual/NRML cost of that particular stock while the margin required is the amount you need to pay for the given quantity of stock as BO or CO.