Nifty future has lowest margin requirement in future segment for intraday trading. Positional trading requires margin of Rs.155,000, whereas nifty future intraday trading requires margin of just Rs.80,000.
This is major reason nifty future is widely chosen as a trading instrument with high liquidity and volumes. Many stock brokers allows trading margin even less than Rs.25,000 for intraday trading in nifty future.
However, traders need to keep in mind that such a level of margins acts as a double-edged sword, which can magnify profits as well as losses. Most of the full-service brokerage house offers high leverage, but with high brokerage too.
My experience with less margins:
I do remember when one of my partners opened a long trade on nifty future above 15180 level of 3000 quantity with margin in his account just Rs.25,00,000. He made a quick profit of 70 points and closed the trade, gaining 70*3000 = Rs.2,10,000 well he paid huge brokerage for that position it was about Rs.6,000 excluding taxes.
Finally your trade will depend on your technical analysis skills, if your analysis is perfect you will make lot and lot of money doing few intraday trades in a month. But still that was a very risky trade, he would have lost a lot of money which he didn’t own.
So a trader with such high profile risk must be aware of the risk involved while taking positions. Leverage is sometimes good but can be bad if analysis goes wrong somewhere.
One of my experiences with high leverage was so bad, that it almost killed my trading career. But able to cut my losses quickly, helped me to learn a lot about risk management.
I will advise intraday traders to keep leverages as low as possible and place stop losses and targets to wider areas. This will help you to survive those intraday swings, which would otherwise eat up your stop losses.
We are now offering the lowest brokerage trading account, which has ZERO brokerage for delivery-based trades.
AVINASH PATIL says
Very useful post.
AndreyKr says
This margin you are talking about must be for intraday, because for overnight position, exchange has set a minimum otherwise which a penalty is levied, immaterial of which broker you trade with.
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