Margin Money Catalyst For Profit

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Topic : Margin Money Catalyst for Profit
                                                                                                                                                                   

Introduction : 
In this article we will going to discuss, understand and learn about Margin in Intraday Trading.
What is Margin Money? Why Margin Money required? Where we get Margin Money?
                                                                                                                                                                   

What is Margin Money?
Money which borrowed from somewhere for specific time for some specific purpose is known as Margin Money.
                                                                                                                                                                   

Why Margin Money required?
If we have limited amount of money for our trading and we are sure that today market is going to move upward or downward.
                                                                                                                                                                   

Where we get Margin Money?
There is a provision of Margin Money for Intraday trading by few Brokerage houses, in limit portion for one day ie MIS ( Margin Intraday Square Off ).
These MIS margin % is different for different Brokerage houses in proportion from 3 to 14 times
depending upon the Stock category (A,B,E or Z).

Take a look below :
A category stocks may get 14 times of margin.
B category stocks may get 7 times of margin.
E category stocks may get 3 times of margin & So on....
                                                                                                                                                                   

Explanation with Practical Example :
Suppose you have $1000 with you and you are damn sure that today market is going to move upward and one of your selected stock is also having very solid news which will lift it price up by atleast $20/shares.
Then for today you can use the MIS margin money for gaining the benefit of stock upward moment.
And fortunately it is of A Category stock which is pricing at around $50/share.
So it will be possible for you to take around 14 times of margin money for today.

Condition 1 :
Without Margin money we have $1000.
We can buy around 20 stocks,
Which will make a gain of $400 ( $20 * 20 stocks )

Condition 2 :
With MIS Margin money now we have $1000 * 14 times = $14000.
We can buy around 280 stocks,
Which will make us a fabulous gain of $5600 ( $20 * 280 stocks )

                                                                                                                                                              

Point to be Taken Care :
As clearly intended in the starting that, this is MIS margin money means MARGIN INTRADAY SQUARE OFF.
Which means whatever happen in the price moment of stock up or down, the position have to be square off 15 mins to 30 mins manually before day closing otherwise RMS selling will be done and position squared off by system itself.
Whatever situation may be profit or loss.
                                                                                                                                                                   

Conclusion :
So Friends from above discussion it is very clear to us,  MIS is a very helpful tool for us.
But to be handled with care and should be used only when you are very very sure of trend movement upward or downward.

So Friends, All the best! Use Margin money proper way.

Disclaimer : This article is only for knowledge and information sharing and not for any type of recommendation.