Intraday share trading or margin trading is for traders who want to gain from market fluctuation in a day but have limited money. With intraday share trading on margin stocks, a investor can buy or sell stocks 4-5 times more than than the amount he or she has in bank account.
Example: You want to buy 100 shares of GOOG @ $ 580. The total cost would be $ 58,000. But if you are buying with an intraday perspective then you can buy the same under Margin Trading with a fixed Margin Amount. Margin Amount is the amount of money that you must have in your bank account to buy or sell shares.
Under Margin Trading, you will require only a Margin % of the money required for the transaction. If the Margin Amount to buy shares of GOOG is 20%; then the amount required for the transaction would be 20% or total trade value. In this case the Margin Amount is 20% of 58,000 i.e. $ 11,600.
Margin trading helps you make profit from intraday movements in the stock markets if the price moves in your favor. If the movement of price is not in your favor then you make loss.
Under Margin Trading, you will require only a Margin % of the money required for the transaction. If the Margin Amount to buy shares of GOOG is 20%; then the amount required for the transaction would be 20% or total trade value. In this case the Margin Amount is 20% of 58,000 i.e. $ 11,600.
Margin trading helps you make profit from intraday movements in the stock markets if the price moves in your favor. If the movement of price is not in your favor then you make loss.
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| Intraday Share Tading |
How is Intraday Share Trading or Margin Trading Done?
In intraday share trading, you have to select the option "Margin" when placing a BUY or SELL order. If you are buying under margin, then you will make profit at the end of the day if the prices rises. You will incur loss if the price falls. If you are selling shares under Margin, then you will make make profit if price of the share falls. You will make loss if the price rises.
All margin orders can be squared off anytime after the order is executed. For e.g, if you buy 100 shares of GOOG @ $580 and the price rises after just 5 minutes of 10 minutes, you cal sell your shares and book profit. All margin orders must be squared off before the market close on the same day.
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