hi,
I had a kotak account for abt 6 months. If you're planning to hold a stock for 4 days max, Kotak is good.
Example:
Suppose there is a stock XYZ trading at Rs.100 and you have 1 lakh in your account.
You purchase 1000 stocks on monday. Kotak does not immediately debit 100 * 1000 = 1 lakh from your account. There is normally a minimum margin for a particular stock. Most of the stocks have it as 20%. Very few of them 100%.
Note what is the minimum margin for the stock. (you get it from their website link).
case a: Let's say it is 100%. Then, Kotak immediately debits 100% of the 1 lah used from your account. Effectively, you have 0 rs. (Which is the normal condition)
case b: let's say the minimum margin for XYZ is 20%. You effeectively have used only 20% of 1 lakh = 20000 (and the remainder has been paid by Kotak) and you have a balance of Rs.80,000 in your account - and you can go on purchasing until it becomes 0.
case c: In case b, let's say you plan to utilise the remaining 80% (ie. 80,000) also to buy XYZ. Effectively, you can purchase 4000 shares more (assuming stock price is still 100). Hence, you can have 5000 shares (total value = 5000 * 100 = 5 lakhs, but margin utilised = 20% of it = 1 lakh)...hence your 1 lakh is utilised as margin.
In case c, Kotak requires you to clear up the margin on T+4 days...ie on Thursday. ie. let's say the stock price suddenly on tuesday decreases to 50. Hence, on Thursday, you can hold upto 2000 shares alone (note that here, I did not calculate brokerage charges, and other charges). So you need to sell off 3000 on Thursday. If you don't, on Thursday, Kotak sells off the shares themselves.
This is a good method for buying and holding if you feel that the stock price is going to rise in two-three days. But in case it falls till Thursday, it is risky.
Talking about interest: Yes..they charge at 24% pa. For every lakh, you pay around 60 rupees per day. In the above case c, they would have charged interested for the excess 4 lakh that you have borrowed. ie: 240 per day for four days (Monday - Thursday) = Rs.960. This is very profitable if you plan to do intraweek trading. But would suggest you to have at least two advisories before beginning to trade. Very profitable, if you are disciplined.