The Margin Calculator calculates the needed margins and leverage for trades in all segments. It may also be used to assess the margin advantage for multi-leg F&O strategies across segments, verify the allowable strike prices for index F&O contracts, and track contracts that are banned.
Margin of Value at Risk (VaR)
- For the purposes of VaR margin, all securities are divided into three classes.
- For the securities in Group I, daily returns are adjusted for scrip-level daily volatility determined using the exponentially weighted moving average approach. The daily VaR for each scrip is 3.5 times the volatility, subject to a minimum of 7.5 percent.
How do you figure out the minimal margin?
Investors often incorporate margin trading into their stock market trading strategy since it may result in larger earnings by allowing them to buy more equities. When you borrow money from your stockbroker to buy more stocks, this is known as margin trading. It’s similar to taking out a loan to buy/invest in more stocks, which you must repay to your stockbroker with interest over a certain length of time, with the stocks serving as collateral. However, because the stock market is volatile, acquired shares may lose value, rendering the investor unable to repay the borrowed margin. Stockbrokers require investors to maintain a certain margin in their margin account to safeguard their interests.
What is the smallest possible margin?
The minimum margin, also known as the maintenance margin, is the minimum number of stocks that an investor must have in their margin account. Assume you purchased 1,000 shares of a corporation for Rs 10 each, and the maintenance margin is 30%. If the first margin (described below) is 50%, the investor must pay Rs 5,000 upfront, with the brokerage providing the remaining Rs 5,000.
Because the maintenance margin is 30%, the investor must keep Rs 3,000 in the margin account (30% of 10,000). If the price falls to Rs 5, the investor will have less than Rs 3,000 in stock. The stockbroker will utilise a margin call in this scenario, requiring the investor to deposit sufficient funds.
How do you figure out the minimal margin?
Here’s how to figure out the minimal margin:
- Step 1: Log into your margin account and figure out how much all of your shares are worth. Consider the following scenario: you own 1000 Rs. 10 shares and 500 Rs. 15 shares. Rs 10,000 and Rs 4,500 would be the entire value.
- Step 2: Examine the entire balance of the margin loan (the amount you have to repay). Let’s say it’s Rs 5,000.
- Step 3: Talk to your stockbroker about what the minimum margin percentage is. Assume the percentage is 30%.
- Step 4: Now multiply the total value of your shares (Rs 10,000 + Rs 4,500) by 30% to get Rs 4,350.
Conclusion
Now that you understand everything about Brokerage Calculator you can get in touch with your broker and start trading the shares.
