Hi,
Could you please throw some light on margin trading?
Also, please let me know how the exposure is calculated to determine the margin available for me to trade for a particular day.

For instance, I own a ShareKhan trading/demat A/c. My trading a/c has a balance of Rs.1L. What is the margin available for me to trade on that particular day?
The SK guy says i have 4x exposure and 10x exposure for 200 selected stocks. Someone please guide me with detailed explanation. Thanks in advance

If you have Rs. 1000 in your trading account and you have 4x exposure for all stocks and 10x exposure for 200 stocks, then you have a margin of Rs. 4000 for trading all stocks and margin of Rs. 10000 for trading in 200 selected stocks.

For small cap stocks & volatile stocks, you get 4x exposure.
Ex. VIP,hitachi


For large cap stocks and Group A stocks which are less volatile, you get 10x exposure.

Ex. SBI,HDFC, Infosys, ICICI, RIL

[quote=Opportunist;29415]Hi,
Could you please throw some light on margin trading?

A relatively small drop in stock price can trigger your stop-loss or margin call, so the probability of losing money is greater than the probability of making money.

Someone may profit from this trading but this is a zero-sum game and most investors end up losing money. Margin trading is a double edged sword, which amplifies both losses and gains to the same degree. Because leverage magnifies everything, it hugely increases the risk in your portfolio.

A common belief is that 90% of day traders lose money.

I believe that many traders think they are sure that they can read the market and feel that they can foresee the reversals, which would give larger returns. What they fail to see is that the market will always win. It doesn't have a bank account that can run out, and couldn't care less what you think it should do.