Sebi may raise trading margins in commodities | Mcx India
Margin/Exposure - AsthaTrade , Online Stock Trading at
Foundation knowledge to invest in stock market in India
Hello everyone, I thought many of us are willing to invest in stocks or the stock market in India but are unaware where and how to begin. I am posting about the basic details: Basically, we have exchanges which provide us a platform to deal in stocks. Definition of exchange: Open, organized marketplace where buyers and sellers negotiate prices. There are a total of 21 stock exchanges in India, with the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) being the largest. For commodities we have MCX and NCDEX Well, the first step, talking in India you need a demat account. Now what is that: An account that holds all the shares that you purchase in electronic or dematerialized form. Basically, a demat account is to your shares what a bank account is to your money. Like the bank account, a demat account holds the certificates of your financial instruments like shares, bonds, government securities, mutual funds and exchange traded funds (ETFs). Now with that definition, let me elaborate you need a demat account only if you are willing to deal in Shares that too taking the delivery or holding the shares for T+1 day. If you want to invest in other than stock market you need a demat. BUT if you are planning only intraday or day trading; you don’t need a demat account. YOU NEED ONLY TRADING ACCOUNT. How to open a demat account? Choose a broker on parameters: brokerage charges, annual charges and leverage provided. Fill up a form; submit documents like PAN CARD, CANCEL CHEQUE, ID PROOF, and INCOME PROOF (BANK STATEMENT OR ITR) AND INVESTMENT OR MARGIN CHEQUE. WHAT IS MARGIN AND LEVERAGE? Margin is your investment amount that you are investing and leverage is the limit you get on it. Let’s say you have 10,000/- to invest that is your margin and leverage is limit that broker provides for trading. Like if he gives you 4 times limit that means you can make a trade where you will need a margin of 40,000/- Why? Because broker make commission on turnover more turnover you make in buy and sell more profit he makes. You have types of orders at trading platform or the terminal: CNC (Cash n Carry): For delivery based equity trades. To buy stocks for CNC or for delivery 100% money required. To sell stocks as CNC, stocks need to be available in holdings. MIS (Margin intraday square off): For intraday trades Trade using MIS for additional leverage/margin. All MIS positions auto-squared off 10 to 15 minutes before close of markets or when losses exceed 50% of margin (Auto-square off rule can vary based on market conditions).
Upto 10 times intraday leverage for equity
Upto 3 times for futures
Upto 3 times for options shorting
No leverage for option buying
NRML (Normal F&O trades): For intraday/overnight F&O trades without additional leverage. Exchange stipulated margins, positions taken as NRML can be held until expiry, provided required margins maintained. Types of Orders:
Limit (LMT) order: Place buy or sell order at a predetermined price
Market (MKT) order: Place an order to be bought or sold at the best available price.
Stoploss or trigger orders (SL and SL-M): Stoploss if placing a predetermined loss booking order at a trigger price. Trigger if using this type of order to enter a fresh buy above the current market price or sell below the current market price when the trigger price is hit. SL if limit order to be sent when trigger is hit. SL-M if a market order to be sent when trigger is hit.
Advanced order types:Regular orders with time validity: Day orders for orders to be valid till end of day (selected by default).
IOC (Immediate or cancel) for orders to be cancelled if not filled completely immediately.
Bracket orders: Intraday limit orders (NSE, NSE F&O) with a target and stoploss and an optional trailing SL all placed simultaneously. Target, Stoploss, and Trailing SL all activated only once the original limit order executed. SL automatically cancelled if target is met and target automatically cancelled if SL is hit. Trailing SL which is optional trails the stoploss price or moves the SL price every time the scrip moves in a favourable direction by the trailing stoploss value mentioned.
Cover orders: Intraday market orders (NSE, NSE F&O, Currency, and MCX) with a predetermined stoploss order. Similar to bracket orders, higher leverage due to fixed stoploss and all positions auto-squared off before market close
AMO (After market orders): Place orders for the next trading day the previous day itself. AMO orders can be placed only during the following time duration – Equity – 3:45 PM to 8:59 AM Currency – 3:45 PM to 8:59 AM F&O – 3:45 PM to 9:10 AM MCX – Anytime during the day, if placed during the market hours the order will go through the next day.
You can trade in equity. In equity you have:
Cash Trading or Cash Market: In this buying or selling of securities is done by providing the capital needed to fund the transaction without relying on the use of margin. Cash trading is achieved using a cash account, which is a type of brokerage account that requires the investor to pay for securities within two days from when the purchase is made.
Derivative: It is the financial market for derivatives, financial instruments like futures contracts or options, which are derived from shares or cash segment only.
The National Stock Exchange (NSE) and Multi Commodity Exchange of India (MCX) have held exploratory talks to combine their operations and provide a one-stop shop for trading in all kinds of products. Two people close to the development said that the two exchanges have appointed global investment banks to help in the discussions. NSE has appointed Morgan Stanley while JPMorgan is advising MCX, these people said. The merger, if and when it happens, will help create a bigger exchange with 60 per cent market share spanning everything from equity derivatives to commodity futures. Rather than setting up new segments by themselves, a merged entity offering all asset classes would be good for participants. For one, brokers will not have to maintain separate demat or trading accounts and margins to trade would be fungible, saving costs to broker and clients and contributing to higher volumes in a universal exchange. For example, an equity trader having margin in his account could deploy the same to trade in gold or crude oil futures on the commodity segment offered by the merged entity. Since trading in these commodities entails currency fluctuation risk, those could be hedged by selling rupee (against the dollar) on the currency derivatives segment of the said exchange. NSE already offers a liquid currency derivatives platform. The strengths of both exchanges makes such a merger expedient, according to industry experts. NSE offers the most liquid platform for trading shares in the cash market and derivatives on its futures and options platform. It also offers a liquid currency derivatives trading platform. MCX is the number one commodity bourse in the country, accounting for anywhere between 84 per cent and 90 per cent market share.
Wisdom Capital is an Online Brand of Ashlar Group of Companies. ASHLAR SECURITIES PRIVATE LIMITED : NSE-CM: INZ000203739 | NSE-F&O: INZ000203739 | NSE-CDS: INZ000203739 | MSEI: INZ000203739 | BSE: INB011371839 Table of the latest commodity margins (NRML, MIS). Calculator how many commodity shares you can buy with the available margins. MasterTrust Commodity Margin. MCX trading can likewise be empowered on MasterTrust and is as comparable and simple as the Equity trading. It gives no Megan leverage. MasterTrust Commodity Future Margin. MasterTrust empowers you to contribute to mega and smaller parts dependent on the investment sum accessible to trade. Margin(%) Intraday Margin/Lot (Rs.) Carryover Margin/Lot (Rs.) CRUDEOIL 19-Aug-20 100 3211 136.25 5000 426609 GOLD 05-Oct-20 100 52227 11.53 30000 601926 COPPER 31-Aug-20 2500 509.75 9.31 12744 118597 SILVER 04-Sep-20 30 67171 24.62 15113 496120 NICKEL 31-Aug-20 1500 1085.6 11.31 16284 184107 GOLDM 04-Sep-20 10 52451 11.72 5245 61448 ALUMINIUM MCX Margin: There are several products traded in MCX exchange (MCX Trading Platform) and NCDEX Exchange (NCDEX Trading Platform) with different contracts expiry date. Based on the margin amount required to trade, we classified the following commodities as Mega (Requires huge margin) and Mini (Requires less margin).
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