What is Intraday Margin Cash?: In intraday trading, it defines the selling or buying of the particular shares or stocks within the same the position will be square-off. The trades starts with the same day and also gets square at the timing when the market closes. In this article, we will see the intraday margin cash and its definition. This margin trading provides leverage to the traders to trade in the intraday activity.
What is Margin Trading?
Margin trading defines the procedure where the individual investors or traders buys more stocks than the one can afford. This service has been provided by the stockbrokers in India. This trading involves the buying and selling of the securities in just one single time frame. This process requires the traders or the investors to make a mindset about the speculation or to guess whether they should go for buy or sell of the particular stock.
Margin trading can turn your money quickly into the profit deals but the leverage should be taken on an over-limit than you afford to. If this thing happens then the trader will lose more amount then he used to trade-in. With the innovation of the electronic platform for stock market exchanges, this provides the facility that the small traders also get access to use these platforms.
Procedure
This process is quite simple and easy for traders to use it. This margin account provides the trader to resource the more quantity whether to buy or sell a particular stock within a time-period at an affordable price. Just for this purpose, the broker will lend the money to the trader in order to buy the shares and keep them with him as collateral.
In terms of trade with using the margin account, there is a requirement to place the request to the broker to open a margin account. This will be required to pay a certain amount of the money upfront to the broker in cash that is called the minimum margin. This will help the broker to recover the money that will be square off if the trader loses the bet and if that it fails to recover the money.
When the account is open, then it will be required to pay an initial margin which is just a certain percentage of the total traded value that is pre-determined by the broker. Before you start trading, you will need to remember the three important steps.
1. You need to maintain the minimum margin through the session because of the volatility in the day and that the stock price can fall for more than one time a day than anticipated.
2. You need to square off the positions at the end of the every trading session and if you bought the shares then you need to sell the shares within the market hours and vice versa if in case you sold the shares.
3. The final important point is you need to convert it into the delivery order after every trade and if in case you will have to keep the cash ready to buy or the shares you had bought or sold during the session and need to pay the broker’s fees and the additional charges.
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Through this blog, you will understand the basic meaning of “What is Intraday Margin Cash” and its process. We had tried to make this content as simple as possible as because this is the important factor for the intraday trading and every trader or the investor should know about its meaning and its process. Trading Fuel just provides a platform for the learners to learn and to stay upgraded with the stock market. For further any clarifications or any doubts, you can easily contact us through e-mail address. Learn and read more from the materials we are updating on our blog site.
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