Shares as Margin Amount for Trading in FNO

Hi,

I'm having DMAT a/c with icicidirect. Here I am having an facility to use invested amount (long term equity buy) to use as an margin money for trading in Futures and Options.

For e.g. if I'm having equities worth Rs. 1Lac, I can get upto Rs. 80,000.00 for trading in Futures and Options.

Does your service provider giving you this facility. Is it advisable to trade on this margin. Please suggest Pros and Cons of this........


Saymoh

My Broker IIFL is also providing something in the same lines.
The holding value of the shares is given as margin for trading.
But this is for 7 days only.After that they will liquidate ur position.
But if u keep on buying/selling in between u can do that.
This is very good.
There is saying in my local language which rough translation is
"Frying fish from fish's own oil" is adequate here .:lol:

If u do profit u keep it,
If u do loss then u have to immediately refill it otherwise they will sell ur stocks.

Hi Saymoh,

Hold your equities, since you have said it is long term.
check out whether the stocks are fundamentally sound.
it is not advisable to trade on margin, also avoid futures and options.

@rajesh2007 why is it not advisable to trade on margin or why shud one avoid futures and options. And why do u feel equity is more safer than FNO ??
Because i think options are the best hedge available in the market and till one learns proper trading in FNO one cannot be a complete trader....

Baithe, bithaye, Jannat Dikhaye....yes,it is possible provided one know's how to trade!
and yes,95%of us are losers!

earthy8