Hi I wanted a little help please on intraday margin requirement.
I have checked the zerodha margin calculator, suppose I want to do intraday on Vedanta, whose current price is 327.05 and it shows 11x margin, so say I have 5000 to invest . so it says I can buy 169 shares.
So If i place a buy order under MIS , i just need to input 169 shares, when my account balance is 5000 Rs ?
Do i need to have any additional margin, just in case the price falls way below eating up my 5000? Or 5000 is the only amount i need to keep to buy 169 shares in this case?
Why would you want to keep a position in deep lose?
Vedanta share price = 327 rs.
You have 169 shares.
Now, if stock price falls 10 rs. then your loss = 10x 169 = 1690 rs.
So more the stock price falls, more your loss.
But why would anyone in the first case keep a position open going in deep loss?
You would keep a mental STOP LOSS if not in system. Before taking a trade, you take a decision defining your limits.
Secondly, coming to your question,
maximum loss your position can afford to have is 5000/169 = 29.5 rs.
So if share price declines by 29.5 rs from 327 .
So if share price reaches 297.5 rs then your entire capital will be wiped out plus taxes extra.
Thirdly, your account balance will go into negative & you will have to deposit equivalent amount to neutralize the charges otherwise your broker may charge a penalty which is interest on additional amount on per day basis.
You may receive a call from your broker during market hours itself or your broker may also square off your position.
Generally during high volatility the broker may not be able to square off your position quickly before it reaches in deep loss.
Now you will have to settle this negative balance with broker or you can run away
But running away wont help you because broker has all your records documents PAN card, Aadhaar id.
So you have to settle the matter with peace & many brokers do help out their clients with negative balance but you are liable to settle.
11x mis margin means if you have 100 rs in your trading account you can buy worth 100 * 11 = 1100
but, you can keep these share till 3:15pm only, if you don’t square off that time zerodha will do it automatically
but remember when you are buying for 11 times more, your profit will be 11 times and also loss be 11 times more