Future and Options Leverage

General
1

Hi, my question is like this.

  1. Suppose I’m buying Nifty Future of 1 lot (75 shares) using Bracket Order , keeping Stoploss at rs 10 and target at rs 20 with trailing stoploss at rupees 2, what would be my maximum loss in this trade if it goes in opposite direction?

  2. The margin required is 12085 and leverage is 55.6x. As I’ve read in Varsity that higher leverage can wipe out the capital pretty fast if trade goes in wrong direction,but as I’ll be using stoploss in this trade (mentioned above) will there still be higher risk?

  3. Is this trade even possible? how much leverage does Zerodha actually provide?

Screenshot provided in below. Please answer as detailed as possible. Thank You.

trading.png1366×728 54 KB

2

In Bracket order your maximum loss in your example is 75 x 10 = 750. Which is 6.2 % of your capital.

Loosing that much per trade means in fifteen trades you will loose all your capital.

90 % of New traders loose money and 99% of new traders who use bracket orders will loose money.

2 Likes
3

@haribabu , What do you think my stoploss should be in a trade like this? I’ve used 10 as stoploss because in 5 minute chart, nifty moves around 5-8 points in either direction. also what would you suggest as a correction in this trade.:slight_smile:

4

First thing you should not trade with using High Margin using BO. this will only end up in losses, there is less profitability. That is what I learned and changed my way, Now I am buying Futures in NRML order and waiting to get profits. even if it goes down -20k i still keep it. it eventually turns positive.

It is at which point you enter your trade that matters. Buy on Dips gives better profitability than buying when everyone is buying.

Intra Day trading with BO will lead to more losses only.

so my view is BO is not recommended at all if you are new to trading. BO works good for experienced traders who can identify the correct Support and Resistance levels and initiate trades at support levels. But again BO is not used by many Experienced Traders.

You need to execute trade faster in intra day, that is not possible with BO, calculating Stop Loss and Target every time you trade.

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5

Thanks, but 1) isn’t Bracket orders are for Intraday only?? and 2) buying nifty future in normal would require around 6.5lacs + - . With a capital of 20k, how am I supposed to trade? buying bluechips like sbi in normal and wait for profits to come? :sweat:

6

hello trader,

  1. Bracket orders are for intraday only.

  2. For buying Nifty as a NRML Product you need around 70K. (use the F&O calculator for this)

  3. With 20K you can trade the Nifty under the Options Segment. either as a put or call contract.

7

@portfolioplus911 Buying nifty as nrml for 70k @ cnc or mis??

8

Zerodha conduct demo session on daily basis, I think you should attend those. You can write to [email protected] to get some help on this or go to this link from monday to friday at 2.30pm or 6.30pm.

1 Like
9

70k is for CNC which you can hold positioning,
13k is enough to do MIS for nifty futures