What is Intraday Exposure / Margin in Nse ?

Intraday Exposure for Day Traders

A1 Intraday Tips a Reputed Registered Investment Advisory as given information about Intraday Exposure also called as Intraday Leverage or Intraday Margin with live working example so that a normal new trader can understand this concept and do Intraday trading with ease in Nse market.

In Nse Stock Market Intraday Exposure or Intraday Margin or Intraday Leverage means an extra margin i.e. capital given by Broking Companies or Main Stock Brokers for day trading to Intraday traders to trade in Nse market. Intraday Margin also called as a financing option for day traders, provided by broker to enhance your cash level for day trading. Broking houses do this so that you can transact in a much larger scale than what you actually can with your low capital.

Intraday Margin / Leverage is like a double edge sword, its very good if your trade goes as planned but if your trades goes the wrong you are likely to suffer a huge loss.

How much Intraday Margin is Given for Traders

Intraday Leverage / Margin may be 4 times or 8 times of the traders capital or investment with that broker. Some brokers may provide 4 to 10 times also depending on the policy set by them. Some Newly formed Discounted brokers can give the Intraday Margin of 12 times to 20 times of your capital. If market is very volatile, Brokers can reduce the Intraday Leverage as per their rules and regulations laid down in their respective policies.

Intraday exposure / margin is the Extra fund for Day Trading given by brokerage house in traders trading account. e.g. If the Day Trader is having Rs.10,000 amount in his trading account, day traders can trade for an amount of Rs. 40,000 to Rs.80,000 depending on the Intraday exposure given by the stock broking company.

All broking companies have set of rules regarding giving intraday margin to day traders. According to that rules, they provide intraday leverage of 5 times to 20 times to intraday traders. Normally a reputed NSE stock broker or stock Trading Company gives 4 times to 8 times Extra Margin (Day Trading Limit) of the traders Capital.

Intraday traders should not forget that you have to close your all the open position's before some time to market close. This exact timing will be decided by the broking company, it could be 03.00 pm i.e 30 minutes prior to market close @ 03:30. So broking companies could also stretch to 03:15 pm. As you are getting extra exposure only for Day trading, you can’t forward your positions for the next trading session. Intraday traders should square off their position before the decided time by your stock broker or Trading Companies. Stock broking companies will close your position at market rate without taking any permission from Day Traders.

Benefits of Intraday Exposure for Day Traders & Brokers

Intraday Leverage is Beneficial for both stock broking companies as well as day traders. Stock broking companies will get more brokerage and Day traders get extra capital to extra trading and get more profit.

By Giving extra intraday exposure stock brokerage companies make good money on their brokerage as when traders get extra amount to trade in day trading, they trade more which adds to income of this brokerage companies and also add to good profit of Day trader if he makes profit doing Day trading.

Suppose if broker has given you a 5 times Intraday Margin for day trading, the Positive side of this Intraday Leverage / margin is that if your trade goes in your direction you will get 5 times profit, that you could have earned by doing trading with your own capital. The broker will also benefits from this as now he will get 5 times more brokerage.

If trade goes the other way and if your stop loss gets hit, you will lose 5 times the loss, but in this also your broker will gain 5 times the brokerage. So this is win win for broker and caution for trader. So in Short If your calculations are right you will get multiple times return but if trade goes against prediction, your you will face multiple time loss also. Broker immediately close your position when his interest are at risk. Now there are some broking houses, who do not charge brokerage on losing trades.

Intraday Exposure / Leverage , How it works

Here A1 Intraday Tips has given a Working Example of Intraday Exposure / Leverage / Margin
Mr. Raj Sardesai a Day trader trading in Nse market.
ABC is the name of Broking company (NSE stock exchange card holder )
ABC’S POLICY FOR INTRADAY EXPOSURE / LEVERAGE / MARGIN

ABC a stock broking company gives 4 times Intraday Exposure / Margin to Day Traders, and Day Traders has to Close all position before 3.15 if traders will not close the position before 3.15, the ABC (Broking Company/Share Broker) will square off all positions of Day Traders any time between 3.16 p.m. to 3.30 p.m. ( Nse Stock market time is 9.15 a.m. to 3.30 p.m. )

E.g. Mr. Raj Sardesai is having trading account with fund of Rs 10000 in ABC. So ABC will provide Rs.40000 as Intraday Exposure (Day Trading Limit) for Day trading.
Now Mr. Raj Sardesai buys 50 PNB@ 800 at 10.15 am and Sold's 50 PNB@ 850 03.10 P.M. pm today ( same day ). So Mr. Raj Sardesai has got profit of Rs. 2500/- on same day.
In any circumstances If Mr. Raj Sardesai doesn’t sells 50 PNB before 3.15 p.m. ( According to ABC time policy), ABC the broker has the right to sell the 50 PNB before 3.30 p.m. at prevalent rates in Auction mode.

Nse Stock brokers & Broking Company/Share Broker also provide Intraday Exposure / Margin on good stocks which you hold in your Demat account. If you have a Intraday Margin of 4-5 Lacs, If you easily trade in our all Stock tips. Short Selling also requires good Intraday Exposure / Margin to trade.