Zerodha margin trading FAQ's

 1) What is the borrowing ratio?

The borrowing ratio varies from broker to broker. 

Zerodha exposure allows customers to trade many times over the funds in their account. The extent of exposure by Zerodha is different for different segments and trades. For intraday trades in stocks, leverage given by Zerodha is 20 times of the funds in the customer's account. So, if you have Rs 5,000 in your trading account then you can do intraday trading up to Rs 1 lakh. But not all stocks qualify for margin funding by Zerodha. Also, the margin limit is different for different stocks.

You can use the Zerodha margin calculator to know the margin limit on your trade. The calculator is available at Zerodha's website.

2) How much can I borrow using my existing holdings?

You can trade upto 20 times cash you have in your account.Until last year, the margin trading was allowed only with cash and providing shares as collateral was not allowed. The Securities and Exchange Board of India (SEBI) recently relaxed this criterion by allowing investors to create positions under the margin trading by furnishing shares as security.

3) What are the requirements to avoid margin call?

4) What and how much will get liquidated if there is any defaults?

If you fail to maintain the margin after frequent notifications  the shares in your account will be liquidated by the broker to maintain the minimum margin requirements.

5) How much money will be deducted by Zerodha per transaction on margin trade?

A flat 20 rupees or 0.003% per executed order.

6)  Is it allowed to do carry forward a postion or is this option limited to intra day only?

Yes, the postion can be carried forward if you are trading options or futures else if you are doing margin trading in normal stock, you will have to square off your position within the trade day ( intra-day) itself