How To Do Margin Trading: Complete Guide

In margin trading that is also commonly known as day trading you have to close the deal by the stipulated time that is generally within the very day of the trading.

The biggest advantage of margin trading is that you need not invest the full value of the stocks that you trade in.

Though the amount for buying the stocks is determined on the volatility of the stocks, in most cases you need to invest or have 5% to 10% of the total value of the stocks.

So while doing margin trading you can hold more stocks with the fund than you could have otherwise bought them at the equity segment in delivery based trading. Another advantage of margin trading is that you can short selling of the stocks.

That means you can gain by selling the stocks at higher price and then buying them on the same day at a lower rate. The brokerage of the margin trading is also lower than delivery based trading. [Via]

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