Please let me know while making a trade using BO the stop loss can be increased as per funds available in my account or is there any formula for it.
As per zerodha’s official post here , under margin requirement , it is written :
Margin Requirement
Bracket Order positions get additional leverage since the risk is covered by the compulsory Stoploss that you place while entering a position. The margin required would be based on the quantum of your SL, and in the range of 1.5% to 2.5% of the entire contract value.
Let me explain, in the above example if I shorted Nifty at 6800 that would mean a contract value of Rs 3,40,000 ( 6800 x 50).
Margin requirement would vary from (1.5% to 2.5% of Rs 3.4lks), which is Rs 5100 to Rs 8500 based on your stoploss. As long as your stoploss is less than 102 points (Rs 5100), margin required would be Rs 5100, if your stop loss is 150 points the margin required will be Rs 7500 (150 x 50), and if your stop loss is anything more than 170 points the margin required would not increase above Rs 8500.
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and what if i put more money in my account then can i increase the stop loss range, as i want the target to hit and dont want to watch the screen the whole day for intraday, but i have to watch it for the fear of stop loss getting hit. i simply want
the price to play but there is no other order type in which i can get less margin and trade the position only for target. is there a way?
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As far as I Know , there is max limit till which stop can be extended-upto 2.5%, irrespective of money in account. I would hope if @nithin sir or anyone from zerodha could shed some light on it.
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u can’t increase the stop loss beyond the price band mentioned in the previous posts while using BO…u cant place a SL beyond the 2.5% and there is no additional benefit in decreasing the SL to less than 1.5%
Thanks a lot for the explanation, you summarized it very well. In short it means more margin for a wider SL, I hope it works the same with shares futures.