ICICI Margin Plus orders!!!!!-Please help

Discussion in 'Brokers & Trading Platforms' started by mainak, Jun 15, 2006.

  1. mainak

    mainak Member

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    Once more I am back with a query:

    Can anybody explain to me in layman's language how to use the subject facility through ICICI Direct. I have read the FAQ section and still am unable to understand.
    :(
    Mainak
     
  2. Madosiva

    Madosiva New Member

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    Hi,

    Using the margin plus facility is very easy. Under this facility you will have to allocate only the maximum loss you can incur in a trade as a margin and trade in few selected stocks. Your positions will be squared off through an automated system at the end of the day and the profit or loss from the trade will be debited or credited to your account.

    Say for example you decide to go long on Ashok Leyland (Ashley) tommorrow. You can trade 20 times to the value of the margin you allocate under this facility. So you allocate Rs.3000 for margin trading and buy 'ASHLEY' at market price (In margin plus order positions can be opened only at arket prices and not through limit order), say @ Rs.33 and you buy 1000 shares. You will have to give a stop loss trigger price (which could be at your will and in this case let it consider it to be Rs.32) and a limit price which should be 5% less than the S.L trigger price. The margin blocked for this trade would be Rs.2750 (i.e Rs.33 - Rs.30.25 (limit price) * 1000).

    If 'Ashley' moves up you can move the SL forward to reduce the risk or square it off @ the market price. Say when you square off this position when the price is at Rs.33.50 you will get Rs.500 - brokerage as profit. In case if the price falls and goes below Rs.32 the stop loss will automatically be triggered anywhere between Rs.30.25 - Rs.32 and you will loose the corresponding sum from the margin blocked.If you have more doubts mail me @kesavan.siva@gmail.com

    Hope you get some clarity now.

    Bye

    Siva
     
  3. mainak

    mainak Member

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    that was fast and easy.:D

    One more clarification:

    1.Where do I make the allocation, (in the normal secondary market or there is a special provision)
    2. what is margin plus % and is that different for every stock?
    3. Suppose I make an alllocation of 3000/- , is it true that I can lose a maximum of this amount while trading ?

    Thanks once more for your help.

    Mainak
     
  4. pranayd

    pranayd Member

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    Thanks Mainak for posting thsi query. I am sure there are many who wanted an answer to this.

    And thanks Madisova for clarifying. I have some further queries on the same facility. I am quoting some of your statements to pose my query.

    1. Your positions will be squared off through an automated system at the end of the day
    Cant we square off our position during the day? Or do we have to wait for automated settlement at end of day?

    2. This may be related to the previous one, what is a cover order? Is this the price at which we would like to sqaure off our position? Do we need to specify our cover order while placing the initial order?

    3. You can trade 20 times to the value of the margin you allocate under this facility.
    In the example you gave, is it true that I can place a order worth 66,000/- with a Rs. 3000 allocation?

    Appreciate if you could clarify these doubts.

    Thanks in anticipation,

    Pranay
     
  5. pranayd

    pranayd Member

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    I have given answers to your queries below your points.

     
  6. rajekc

    rajekc Member

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    Hi,

    In Marginplus(Mp) you can square your positon at any time during the day. Once your Mp is executed go to 'Marginplus positons' menu and you can see your mp orders whether they are in profit/loss, position. If you want to square off, there is an option 'Square off', where you can square your positon immediately, and no need to wait until Automated system.
    You have to play marginplus only if you're sure the price goes in your direction.

    Bye
    Rajesh
     

  7. PRILIA33

    PRILIA33 New Member

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    There is one point that seems to have been ignored. Eventhough the bank will try to square off your open positions starting at 2.55 pm, in case this does not happen due to any reason, you will have to come up with the funds for your purchase.

    Also, if you allocate Rs.3000, you can make trades worth approximately Rs.60,000, but the risk of losing your investment is very high. Taking the same example given by Siva, if you buy ASHLEY @ Rs.33 with a trigger price of Rs.32, it means that the bank will square off your trade if the price falls below Rs.32. Therefore, you will stand to lose Rs. 1,000 or more. A better way would be to set your trigger price to the lowest price of the day in the last 90 mins.

    Should the stock move in your favour, then it will be a good idea to put trailing stops to preserve profits. For example, you buy 1000 shares of ASHLEY @ Rs.33. If the price goes up beyond Rs. 34, then you can modify your trigger price to Rs.34, thereby preserving a gain of Rs. 1000.

    Hope this is helpful
     
  8. mainak

    mainak Member

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    hi

    thank you all especially Siva for making me and hopefully other boarders about this facility.

    Made a paltry profit of 100/- on my first day but was fascinated for the entire period i was day trading.

    Thanks once more

    Mainak
     
  9. Madosiva

    Madosiva New Member

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    Hi,

    I am glad that i could clarify a few of your doubts. First i would like to answer to Pranay.

    Margin Plus Positions can be squared off any time during the day and you need not wait for the automated system to square it off.

    You can indeed trade 20 times to the value of margin amount. But usually trade 5 to 10 times to minimize risk.

    Cover order is for covering the trade in case if the SL is triggered and it will get triggered only if the price goes below your SL and if does'nt, it will not.

    I am glad with the comments of Privilia13 for minimizing your risk by moving the SL forward when you are in loss. Please visit my blog www.art-of-investing.blogspot.com as i will shortly be reposting one of my articles on day trading and this could be of some help to you. You can also find this article in my other blog www.compys.sulekha.com under the February Archive.

    If you are day trader you must be using this facility as there is no better facility offered by any broker like that of ICICI Direct and i have been using this facility for the last year or so and i am good at putting it to good use. Even marginal movements of 10-15 paise can make you good money if you could use this facility.

    If you have any other queries please mail me at kesavan.siva@gmail.com and i would be glad to reply and since tommorrow is non-trading day, i can respond fast to your queries.

    Thank You,

    Siva
     
  10. PRILIA33

    PRILIA33 New Member

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    Congrats Mainak, but sorry to spoil your party. If you have made a profit of Rs. 100 in trades, then you might be a bit disappointed when you look at it on Monday. You will find that the bank has taken out commission and will only pay you the rest, if you have any left.
    The commission is calculated @ .010% of trade value(subject to a minimum of Rs.15.00) + sales tax @ 12.25% of commission. In addition to this you will be charged .0025% of trade value as STT on the sell leg of the trade.
    So for example let us assume you purchased 100 shares of SAIL @ Rs.69.00 and sold @ Rs.70.00, you will make a profit of Rs.100. However, the actual profit in this case would be Rs.64.58. The calculation is below:

    Buy Order Value Rs.6900 - commission Rs. 15.00 + Sales Tax Rs. 1.84
    Sell Order Value Rs.7000 - commission Rs. 15.00 + Sales Tax Rs. 1.84 + STT Rs.1.75.

    Therefore, you have to keep in mind that if you buy 100 shares of ACC @ Rs. 690 and sell @Rs. 691, eventhough you have made a gross profit of Rs.100, the commission and taxes works out to Rs. 172.28, so you will end up paying the bank Rs.72.28 out of your pocket, eventhough you have made a profit.
    I have been trading using ICICIDIRECT MarginPlus for quite a while now. I put the values of my trade into an excel spreadsheet and then decide when to quit, making sure I will have some profit left after paying commission and taxes.
    Good luck
     
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