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Shares and Commodity Trading In One Account

Shares and Commodity Trading In One Account Starting 01 April 2018 we unfold a new chapter of trading in the Indian stock market where commodity and equity clients can trade with a single entity. Let’s understand the history/background of this new chapter. The Indian derivatives market is divided between equity, currency & commodity market where Equity & Currency market were regulated by SEBI and The commodity market was regulated by Forward Market Commission (FMC). Arun Jaitley (Finance Minister of India) during the budget presentation of 2015  proposed SEBI as the single regulator of equity, currency & commodity derivatives market and as a result, SEBI on 28 Sept 2015 took charge as the single regulator. SEBI being a single regulator on Sept 2017 proposed trading in equity and commodity market via a single entity.   So what is in to for Traders?? Current Scenario Individuals who trade in both equity and commodity market have to transfer money to 2 companies (one of equity & other of a commodity) and this was a huge constraint as it would result...

Margin Shortfall Penalty

Margin Shortfall Penalty Margin shortfall penalty will be levied by the exchanges when there is a margin shortfall on overnight positions held in trading account without sufficient margin as prescribed by the exchange. This penalty is applicable only for overnight margin shortfall however it does not apply for intraday positions. Margin shortfall is applicable to stock, commodity and currency exchanges (NSE, BSE, MCX and MCX-SX). For more details about the prescribed margin required for Derivative future contracts please visit Daily Margin required for NSE Future contracts. How the Margin Penalty is calculated If the overnight margin is less than 1 lakh and the margin shortfall is less than 10% of applicable margin then, 0.5% of penalty is levied and in case if the margin exceeds 1 lakh or the margin shortfall exceeds 10% of applicable margin then, 1% margin is levied on the margin shortfall. Short collection for each client Penalty percentage (< Rs 1 lakh) And (< 10% of applicable margin) 0.5% (= Rs 1 lakh) Or (= 10% of applicable...

Cover Order Explained

Cover Order Explained Cover order is a high leverage feature for intra-day traders to take advantage of high margin trading exposure with safe and controlled risk. Cover order is a set of two orders placed simultaneously. Cover order is currently enabled for NSE Cash, NSE FNO and NSE Currency segments. 1st leg – Market Order 2nd leg – Stop Loss trigger pending order (Market Order) In case of Cover Order first order is always a Market Order and its corresponding 2nd leg Stop loss trigger pending order also placed simultaneously and sits in the order book. And the stop loss order is compulsory. Once the price touches the stop loss trigger price, 2nd leg order will be executed as market order. Cover orders can be used to execute trades with better risk-reward ratio, where you want to limit your potential trading losses and allow the profits to run. Cover Orders enable traders to maintain their trading discipline. Traders can take advantage of the margin benefits as well, using the Cover Order facility...

BRACKET ORDER EXPLAINED

BRACKET ORDER EXPLAINED Bracket order is an innovative feature for day traders to take advantage of high margin exposure with safe and controlled risk. Bracket order is a set of three orders placed simultaneously. Bracket order is currently enabled for NSE Cash, NSE FNO, NSE Currency segments.   1st leg – Limit Order 2nd leg – Take Profit Limit Order 3rd leg – Stop Loss Order   Once the Limit order gets triggered both ‘Take Profit’ and ‘Stop Loss order’ get activated. Now if the price hits the target price then ‘take profit limit order’ gets executed and the stop loss order gets cancelled automatically. Similarly when the stop-loss hits automatically the take profit order gets cancelled. Bracket orders can be used to execute trades with better risk-reward ratio, where you want to limit your potential trading losses and allow the profits to be executed with a pre-defined risk reward ratio. Bracket order also comes with trailing stop-loss functionality which automatically trails your stop loss with regard to current market price and...