With effect from 7th May 2018, the margins/leverage available for trading will be increased for the INTRADAY timeframe across all segments. We have decided to implement this after personally interacting with active traders and understanding their requirements in detail. Please note that the leverage provided will be subject to change based on the underlying volatility in the index, individual scrips, impact costs, major macro events and stock specific events too. During such times, the margins required will be changed with or without prior notice, depending on the situation. The presentation of leverage as ‘x’ denotes a multiple or number of times leverage given when compared to overnight margins (SPAN + Exposure) required per lot for futures and premium amount for options. I will take explain this with a few examples:
- Futures & Options selling:
Let’s assume that the SPAN + Exposure margins for 1 lot of Nifty futures is ₹60,000. A leverage of 4 times (4x) means that you will be able to take a position with just ₹15,000 (15,000*4 = 60,000).
- Options Buying:
SPAN + Exposure margins are not applicable for option buyers. To initiate a trade, you will have to pay the entire premium for 1 lot. However, we have provided some leverage for near-month Nifty contracts. Normally, to buy Nifty 10800CE you’ll have to pay the entire premium of ₹5250. (70 Price* 75 Lot Size). However, if you use cover orders to buy, you will get some margins/leverage and you can buy it for a lesser amount. With a leverage of 1.3x, you will be able to buy 1 lot with just ₹4040 (5250/1.3).
This is the simplest of all. For instance, assuming the leverage/margins is 16x, it means that with a capital of say ₹10,000, you can take a position of up-to ₹1,60,000.
Margins / Leverage provided in the INTRADAY time-frame will be as follows:
- Equity Index & Stock Futures – 4x.
- Equity Options (Option Sellers) – 4x.
- Equity Options (Option Buyers – Cover Orders on Nifty Near-Month contracts) – 1.3x.
- Equity – Up to 16x (Each stock is assigned a different leverage depending on the underlying volatility/risk management policies).
Since the above-mentioned margins/leverage are subject to change from time to time, I encourage you to track the latest margins required on our Margin Calculators page. In the derivatives section, we show you the number of lots you can buy for with your capital intraday & overnight with the required margins per lot. Please note, that all intraday positions will be squared off by our risk management team before the closing hours of the market, if they are left open by you. If you intend to carry your position overnight, ensure to change the product type from INTRADAY to MARGIN. It is important to note that the risk assessment happens on a daily basis and in case there are any changes to what I’ve mentioned in this post, you can find the latest details in our Margin Calculators page. If you like our trading platforms and the overall experience at FYERS, do refer your friends to us. For any doubts or clarifications, write to us in the comments section below. I’m pretty active here.
Tejas is the Co-Founder & CEO at FYERS, the youngest team to get NSE’s broker license. He has a specialization in finance and has over 10 years of work experience spanning across proprietary trading, risk management, and broking. Tejas & his team started FYERS, a technology-focused brokerage as a mission to transform the trading/investment landscape in India.