Margins

#1
I want to start trading in F&O but am little confused about margins.
for example,

-Suppose I have 800 Infosys in my demat ac, purchased a long time ago.

-I want to go short in futures of Infosys, for that margin is needed. Now I already have that much worth of shares in my demat ac. Still do I have to transfer cash for limits? Can I somehow use the already present shares instead of forking out the cash? There is something like 'shares as margin' mentioned. What exactly is that? Also do I have to pay for this? The brokers' site doesn't mention it clearly.
 

praveen98

Well-Known Member
#2
I want to start trading in F&O but am little confused about margins.
for example,

-Suppose I have 800 Infosys in my demat ac, purchased a long time ago.

-I want to go short in futures of Infosys, for that margin is needed. Now I already have that much worth of shares in my demat ac. Still do I have to transfer cash for limits? Can I somehow use the already present shares instead of forking out the cash? There is something like 'shares as margin' mentioned. What exactly is that? Also do I have to pay for this? The brokers' site doesn't mention it clearly.
Hi Nitin,
Yes you can avail the margin against shares facility if your broker offers that...but they will retain 25 to 30% haircut and give rest of value of your stock as margin...you can utilize that for whatever you want to trade not only infosys as in your example...
You have to apply for that margin against shares facility....over and above that you need to have some cash margin also for M2M to trade in F&O...
Seems you are a newbie to markets...Please study the risks and rewards in trading Derivatives then only take up trading...If you are experienced enough you might have already did this due diligence...
All the Best,
praveen:thumb:
 

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