Where does zerodha lend money for giving 20xmargin?

WHERE DOES FROM ZERODHA LEND MONEY FOR GIVING US 20XMARGIN??

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I’m assuming there is no lending involved here because no lending is required. When you place an intraday trade, Zerodha blocks a certain margin for it. For stocks which have say a 14x margin, Zerodha will allow you to take the trade with just 1/14 times the entire required amount because the trade has to be squared off on the same day itself.

If your position is going into a loss where your loss could excess the total amount in your account because it’s a leveraged trade, then the Risk team will square off your positions accordingly I guess.

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sorry but sir i think you are wrong (When you place an intraday trade, Zerodha blocks a certain margin for it)that part is right but where from zerodha lend margin money example:
i have 1cr in my account and i take leverage of 15x mean 15cr extra 14 cr where does zerodha lend 14 cr does exchange provide that money or banks

You dont understand concept of leverage here,
if you have 1 Cr and took position for 15 Cr. Then you cant hold loss position till whole 15 Cr. Zerodha will cut your position or give margin call when your loss position near to 1 Cr.

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I KNOW IF MY POSITION WILL NEAR 1 CR LOSS ZERODHA SQUARE OF MY POSITION BUT
OK WHO PAY EXTRA 14CR FOR MY OPEN POSITION ZERODHA FROM THIER POCKET OR OTHER
ZERODHA HAVE TO PAy exchange full money yes?

Tell him the truth who pay the money :wink::grinning:

No, As you are not getting the delivery of the stock, Zerodha need not pay the whole amount to the exchange.

God please help me this time…
read below link till end or if necessary next chapters also

DO NOT COMMENT AGAIN TILL READ ABOVE LINK, ITS AN ORDER !! :sweat_smile::sweat_smile::sweat_smile:

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Exchanges in India settle equity trades on T+2 day basis. So what this means is that if you buy, you get stock after 2 days, and if you sell you get money after two days.

When you buy, exchanges don’t ask full money from broker the same day. They give broker time till the next day for this. Exchanges will only block a small % on the day of the trade. Now if the trade is squared off the same day, there is no money to pay the exchanges the next day.

So, no the broker is not funding this. Btw, some brokers claim as if they are.

Where the broker will be putting his capital at play is when he gives leverage on F&O trades. So if a broker is giving 2.5 times leverage on Nifty, i.e asking for only 20k instead of 50k as margin for intraday nifty. The broker will be putting up his 30k because exchanges block entire 50k as soon as the position is taken.

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How did you assume that Zerodha has to pay money to the exchange for intraday trades? During trading hours, Zerodha only accepts orders and passes these orders to the exchange. For these orders, Zerodha also blocks the required margin from your account. Once these intraday positions are squared off, the blocked margin will be released back into your account. Margin is only blocked, it is not paid to the exchange.

All payments to exchange for carry-forward positions happens only at the end of the day but since yours is an intraday trade and it has to before 3.20pm, no margin is paid to the exchange for this.

was not that hard to explain you guys confuses a lot(exchange required a little portion of money till position get settle t+2 and for an f&O broker is lending us money)
@nithin nice explain and thanks for lending us 30k for us
@ganesh07 very useful article thanks