The following write-up gives you our margin policies which will help you out trading equity intraday, equity delivery, F&O and currency on National Stock Exchange (NSE).
Equity Trading:
1. CnC/Delivery - When you take a position & hold the same overnight, it is called as Cash N Carry or a delivery trade. You will need to choose CNC in the buy order entry screen. The settlement for delivery transactions happens on T+2 days. The shares purchased in delivery will reflect in your T1 holdings on the next day and your demat account on T+2 days.
2. Intraday/MIS - When you take a position in equity & square off the same in trading hours of the same day, it is known as intraday equity trading. We at Fyers do provide a margin of 10 to 15 times on more than 250 liquid stocks based on market conditions. In an Intraday trade, your positions will be auto squared off at around 3:20 PM.
Futures Trading:
1. Equity (Stock futures & Index futures) - Futures are derivative instruments which allows traders to take overnight leverage of up-to 10 times in the Indian stock market. With intraday positions, traders can avail an even higher leverage. This changes from time to time. It is explained in further detail below. Usually, NIFTY has more leverage than stock futures due to higher volatility. This margin requirement is decided by NSE which is called as SPAN Margin. At Fyers, settle our trades on T+1 day.
Product types:
a. Intraday - Intraday positions taken on 9:15 AM is set for auto squared off by 3:20 PM. Since intraday trades are not carried forward, we provide a higher leverage component. Basically, you can get a leverage of 2.5X of an overnight position for intraday trades. Example: Let’s say you have Rs. 1,00,000 in your trading account, you can only buy 2 lots of Nifty futures since each lot requires Rs. 49,499. However, if you are going to buy with the INTRADAY product type, you can buy 5 lots. Here is a screenshot to help you understand better:
The margin required and the number of lots you can trade with are clearly mentioned in the table above. To trade in futures, you will need to choose the appropriate product type as shown in the screenshot below. Needless to mention, you must do the same in case you are shorting as well. Use our Margin Calculator to get the latest margins required to trade in stock markets. If you need step by step explanation on how to use it, then read our post for more information on margin calculator.
b. Margin - MARGIN product type applies for overnight positions which can be held till expiry of the contract. Margins will be prescribed by the exchanges. For this product type, you must have entire exchange stipulated amount in your account & you can hold the same till expiry.
2. Currency - Currently, SEBI allows trading in only INR pairs (USDINR, EURINR, JPYINR, GBPINR). There has been communication from NSE regarding their cross-currency product launch, but currently there is no deadline provided by them. To learn more about the possibility and details cross currency pair trading, read my recent post on Forex trading in India.
a. Intraday - Get up to 40% of margin benefits for intraday trades. So, positions taken on 9:15 AM are auto squared off by 4:50 PM. You can trade 1 lot with just about Rs. 500 to 600. The intraday product type in currency futures gives you a leverage of 124 times!
b. Margin - When you select Margin product type, it applies for overnight positions which can be held till expiry of the contract. Margins will be as prescribed by the exchanges known as SPAN margin + Exposure margin. You can track the margin requirements by using our Currency Margin Calculator. Make sure you choose the correct product type to avoid intraday square off.
Options Trading: Equity (Stocks & Indices) and Currencies:
a. Option buying - When you buy options (both calls & puts), there is no additional leverage provided. So if you are buying calls or puts of any contract, the premium required to buy them has to be present in your trading account. You can choose either of Intraday or margin product types available from buy order entry screen.
All the intraday order will be automatically squared off at 3:20 PM with respect to equities whereas 4:50 PM with respect to currencies. Whereas when you take a Margin position, you had to have total amount of margin requirement in your trading account.
b. Option Shorting/Writing - Margins for shorting an option depends on various factors like volatility, underlying, expiry & more. We at Fyers do provide margins for intraday orders, where you will need only 40% of overnight margin requirement. But these intraday orders will be automatically squared off at the end of the day.
Things to remember:
1. For all intraday positions, even though we run square offs automatically, the client should ensure that the same is done with regards to his/her account.
2. Keep track of settlement days. Equity derivatives expire on the last Thursday of every month. The recently introduced Bank Nifty weekly expiry contracts expire on every Thursday.
3. Track stock market holidays on a regular on our Holiday Calendar.
4. Margins will slightly vary for hedge positions. To experience the most efficient way of trading options, I suggest you try out our Options Strategies Lab.
Disclaimer: Fyers Margin Policies can change without prior notice as we dynamically manage risk as per prevailing market conditions and regulatory requirements.