i have been paper trading from a while now and today i decided to start trading with real money on zerodha,
but i noticed that most of the stocks of my screener are not allowed to be traded for intraday. some are not allowed in the name of illiquidity and some are blocked. what should i do? stock not allowed to trade because of volatility is a dumb reason , as a intraday trader we need volatility , isn’t it ? do all broker do this with the same stocks ?
When you trade intraday, you are trading more than what is there in your account. How that’s done is via leverage. Suppose the leverage is 5X which means with 1lac, you can trade up to 5lac rs intraday. Now assume the stock price is 100, and you brought 5000 shares with the leverage having 1 lac in your account.
What happens if the stock price falls by 25% in a day?
25% of 5 lac is 1.25 lac, and you have just 1lac in your account. Now, as a broker, one has to ensure the settlement is done. So this 25k is paid out from the broking firm. Assume Lacs of clients doing this; A broker will be in deep trouble.
This is the reason why brokers have their RMS policy on what stocks can be allowed and what cannot be.
You can check more here.
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Which stocks you tried n wernt allwd ?
You adapt.
Forget leverage, Place a normal (CNC) order. There is no restriction. The charges will be for intraday even if you place CNC order (only if you close it on the same day)
Zerodha RMS has reduced your work…In fact, you would need to have subset of MIS allowed stocks.
@ShubhS9 zerodha is blocking me to trade many of the stock from my screener for intraday , can i buy the stock for CNC order and then sell them on the same day, i am ok with no leverage given on them and same brokerage charges as intraday . i hope by doing so i am not inviting any penalty from zerodha or by exchanges or sebi
one more thing I forgot to tell you,
you will be able to sell some stocks only after you receive it in your demat account.
(you’ll see a nudge)
You can buy is CNC and sell on the same day if the stock isn’t in trade-to-trade category. There is no penalty.