What is Margin trading?

What is Margin trading?

Margin trading allows you to take larger trading positions than what your current cash or holdings would normally allow. By using leverage, you can buy or sell more shares without having to provide 100% of the transaction value upfront.

How margin trading works

  • In a regular trade:
    • You need 100% cash to buy shares.
    • You must have 100% of the shares in your Demat account to sell them.
  • In margin trading:
    • You only need a percentage of the full trade value (margin), and the rest is covered by FYERS as leverage.
    • This means you can take positions that are larger than your account balance would allow in a normal transaction.

This is useful for short-term trades, especially when you expect the price to move within the trading day. However, leveraged trading comes with higher risk and potential for amplified losses.

What if...

ScenarioWhat to do
You don’t have enough margin for a tradeCheck your available balance or reduce the trade quantity
You hold a margin position overnightAdditional charges or penalties may apply unless it's converted to delivery
You're new to margin tradingStart small and monitor how leverage affects your profits and losses

Last updated: 18 Jun 2025