When trader buy stock and margin is blocked. Does broker has to pay remaining amount ?
What exactly happen ? Does Exchange collect 100% value of trade ?
You mean for equity on intraday leverage? then broker funds will be blocked to the tune of var+elm which are collected from client, if someone is providing more leverage than var+elm then broker own funds will be blocked.
GoldM
1 lot/unit = 100 Grams
current price 50000
Margin require = 46000
The actual value of 100 grams is 500000. So exchange only block this 46000 or broker also provide some margin ?
And pay behalf of trader to exchange ?
This is a derivative contract.
Derivatives by definition is leveraged.
Its like a token money you pay before purchasing anything.
F&O are leveraged products, you don’t need full contract value to trade, only SPAN + Exposure margin is collected by the Exchanges.