I am a newbie to share markets.
Just a few days back I opened my IIFL account. I have not signed the running account authorization. I have not signed derivatives, options and futures, just signed the NSE/BSE cash and capital.
At the time of opening the account, I gave Rs.12000 to the sub-broker. He said after the account opening charges are deducted, the remaining amount will be the "margin". (I am not very clear whether margin and exposure are the same thing or not.) Still I said okay.
Then before any trades, I checked the ledger account, there it was given AVAILABLE MARGIN Rs. 10,000 something. I dont remember the exact figure. Then I bought a few shares of reliance and then again checked the ledger account. Now the AVAILABLE MARGIN IS AROUND Rs.11,000.
I thought the margin should reduce like it should be Rs.2,000 as I bought shares worth about Rs.8,000. But instead it increased. Why is it so? If buying shares meant increase of margin, then one would go on buying more and more shares.
Also, when I did not sign the account running authorization, then should not the money remaining after the charges that were deducted from Rs.12,000 should have been transferred directly to my bank account instead of showing in the ledger account as Rs. 10,000.
Thanks in advance.
Just a few days back I opened my IIFL account. I have not signed the running account authorization. I have not signed derivatives, options and futures, just signed the NSE/BSE cash and capital.
At the time of opening the account, I gave Rs.12000 to the sub-broker. He said after the account opening charges are deducted, the remaining amount will be the "margin". (I am not very clear whether margin and exposure are the same thing or not.) Still I said okay.
Then before any trades, I checked the ledger account, there it was given AVAILABLE MARGIN Rs. 10,000 something. I dont remember the exact figure. Then I bought a few shares of reliance and then again checked the ledger account. Now the AVAILABLE MARGIN IS AROUND Rs.11,000.
I thought the margin should reduce like it should be Rs.2,000 as I bought shares worth about Rs.8,000. But instead it increased. Why is it so? If buying shares meant increase of margin, then one would go on buying more and more shares.
Also, when I did not sign the account running authorization, then should not the money remaining after the charges that were deducted from Rs.12,000 should have been transferred directly to my bank account instead of showing in the ledger account as Rs. 10,000.
Thanks in advance.