Margin Trading is also called intra-day trading where you have
to close the deals within a day generally and risk involved is high.
This type of trading also has an advantage that you don’t have to invest
full value of the stocks you are trading with. You will get 5 to 20
times of the margin on that amount which you have actually in your demat account.
Depending on your trading habit and credibility, the broking company
increases or decreases your margin. So it enables you to buy much more
stocks than your actual amount you have invested.
You may also take the advantage of short selling the stocks, it means you may sell the stocks which you don’t even have in your account but you have to buy that stock by the end of the day otherwise you have to bear penalties. One can gain by selling stocks at higher prices and then buying the same at lower prices, all goes in predictions and estimations. Short selling is also considered very risky because you have to buy that stock even at higher prices at the end of the day to avoid heavy penalties. The brokerage of the margin trading is also lower than delivery based trading.
Courtsey : http://tanglesolutions.com
You may also take the advantage of short selling the stocks, it means you may sell the stocks which you don’t even have in your account but you have to buy that stock by the end of the day otherwise you have to bear penalties. One can gain by selling stocks at higher prices and then buying the same at lower prices, all goes in predictions and estimations. Short selling is also considered very risky because you have to buy that stock even at higher prices at the end of the day to avoid heavy penalties. The brokerage of the margin trading is also lower than delivery based trading.
Courtsey : http://tanglesolutions.com
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