Hello, I am new to the market and i am learning swing trading by following ichimoku system. I want to clear some doubts regarding leverage given in intraday cash market.
I found that in intraday even if i want to purchase a stock only on my deposited capital in trading account, i cant do that.
Say, for example - stock price is 800. and i want to purchase it then my broker will always take only margin amount for that share and i would be able to purchase that share.
So suppose only 200 rupees as margin was taken from my trading account. 600 rupees were borrowed for that single share that i purchased.
My question is :
This 600 rupees borrowed from broker has to be returned by the end of day. So , if i keep stoploss there should not be any issue when i do intraday . am i right here?
Say my stock price falls upto 500 rupees than i will in loss of only 300 rupees , right ? That 600 rupees which were borrowed were interest free.
When should i be concerned about losing more capital than traded in cash market intraday ?
Can anyone explain me intraday risks in cash segment by taking examples of trades?
Please give clear examples of trades.
Please help me clear the confusions !
Thank you.
brokers don’t charge interest for intraday leverage they provide… if you only have 200 and face losses of 300… your account will be in minus balance of 100… on that brokers do charge interest until you don’t add funds…
You can do it by using the CNC (Cash and Carry) order type. More on different order types and how they work here.
Yes, the difference between price at which you buy at and price at which you sell (square-off) the position at will be your P&L.
Also, there is no interest charged for using leverage.
Leverage is double edged sword. If you are right, you can make handsome gains, but if you’re wrong the losses will be bigger as well, and can also be more than the capital you have.
hey shubh, thanks for reply. I got most of the points. It means leverage is part of intraday trading in equity. One can’t avoid it.
Can you give an example when i would lose more money in intraday trading in equity than that i put into?
when do we receive Margin call in equity trading , is it when we lose money more than that is in our trading account in equity day trading ?
Secondly if i put stoploss into system , there should not be any issue with losing more money than the traded quantity, right?
Thanks