METATrading Academy

Risk management

Marginsauda karne ke liye jama ki gayi rakam

The money you must deposit with the broker to open and hold a leveraged position, such as a futures contract or an intraday trade.

Margin is the deposit the exchange and your broker require before you can take a position larger than your cash, typically in futures, options selling or intraday equity. It is not the cost of the trade; it is collateral against losses. For futures, the exchange sets SPAN and exposure margins that change with volatility. Suppose an SBI futures lot is worth ₹6,00,000 and the margin is ₹1,00,000. You control the full position with a sixth of its value. If SBI falls 5%, the position loses ₹30,000, and that is debited from your margin the same evening through mark-to-market settlement. If margin falls below the required level, a margin call follows. Buying options needs no margin since you pay the premium in full. Rules on upfront margin and peak margin have been tightened by SEBI; check what your broker currently requires.

Lessons that use this term

Video
Risk7 min read

Leverage and spread, in plain language

Leverage makes a position bigger than your cash. The spread is the gap between the buy and sell price. One multiplies your results, the other quietly charges you on every trade.