Let’s Understand What is Margin Trading?
Margin trading is a facility under which you can buy/sell and create the strategies in F&O that you can’t afford. In the most basic sense, it occurs when you borrow money to purchase stocks. Stocks can be bought by paying a marginal amount of the actual value. In which, the margin is paid either in cash or in shares as a security deposit.
Margin trading can be influenced in the market by the investors. If you invest through a broker or an agent, he reserves your margin trading transactions. The margin can be settled later when you square off your position. You make a profit only when the profit earned is higher than the margin, if not you suffer a loss.
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Benefits of Margin Trading
- You can start trading with a limited amount (Margin).
- Buy/Sell more shares with a lesser Margin.
- Possibility of earning profit margin increases with an expert guide like Axe Alpha.
Now Let us Comprehend What a Future & Options Contract is.
The F&O Trading segment aids you to trade in Futures and Options in stock exchange. The instrument F&O has no independent value. It derives its value from underlying assets like shares and bonds. The value of F&O value varies with the value of the underlying asset. The contract or the lot (total shares) size you have to buy is fixed
What is Futures Contract?
In here, you agree to buy or sell the underlying assets at a ‘future’ date.
If you buy the contract, you promise to pay the price at a specified time. If you sell it, you must transfer it to the buyer at a specified price in the future.
What is Options Contract?
The Options Contract gives the buyer the right to buy/sell the underlying asset at a predetermined price, within, or at end of a specified period.