How to Manage Margin Risk?

General
1

When I place an order using Margin, A portion of money is Blocked in the account and listed as Used Margin and unused Money is shown as Free Cash.

1)If stock price is against the order How this blocked margin is affected ?

2)If Margin of that blocked amount is over, then will the free cash is used as a margin ?

3)Tell me the risk involved in this and also how to manage risk in Margin Trading?

Suggest any Book or sites for gaining knowledge in Risk Management.

2

  1. If it is only an order, the margin blocked won’t really change by much if stock moves against you.

  2. Yes it will.

  3. Don’t think there is a one line answer for this.

I’d suggest you to look at this: http://zerodha.com/varsity/