From the viewpoint of a trader who wants to deal in bulk, the margin
money is one of the important factors that affect his decisions of getting
associated with a particular stockbroker or broking firm. The market has ample
of such service providers, and a trader needs to have a concrete reason why he wants to go for a particular broking firm.
There can be any of the factors such as low brokerage, high-quality services
and best of the exposure to one’s fund, which can help one trade well in the
market. For a trader with huge volume a service provider who offers better
exposure to his margin fund can be of great help as he can carry out trades at
a high volume with the same funds compared to other trading brokers.
What is margin fund?
Well, the margin fund is an amount that one needs to offer to the broker
while carrying out trade. There are various exposure limits as per which the
trader is provided with credit. For example, if the margin money is 10000, and
the broker offers 10 times exposure, that means the client can carry out trades
to the value of 100000. Hence one can have better chances to make profits in
the market. Therefore all traders who need to trade in bulk try to find the
broker with the highest
exposure in India.
How does high margin exposure help?
For a trader, it is necessary to trade in volume so that at a narrow
margin of profit also he can sell the shares and make a profit. If he has
limited investment and cannot increase the margin fund, he may have to face the
limit of the overall fund with the help of which he needs to trade. To avoid
the same one needs to go for the broker who can offer high limit. If one has
margin money of 10000 and the broker offers 10 times exposure that means he can
trade till the value of 100000 but if the broker offers a limit of 20 times
than he can trade till the value of 200000 which means he can trade in more
amount and earn more profit Integrated IO Fountain Hills, AZ - Phoenix Audio, Video, Business & Smart Home Solutions.
If the trader has bought shares of 100 Rs in the first case, he can go
for 1000 shares only while in the second case he can buy 2000 shares. If he
sells the shares at 105, he can earn a profit of 5000 in the first case while
in the second case he can earn 10000 profit. Hence the broker who can offer
more exposure can be of much help to the intraday traders.
However, here, one needs to note that more exposure means more risk also,
and hence, one needs to use the credit prudently. Those who know how to trade
in the market in any condition the broker with more exposure can be the best
option with the help of whom he can trade more and earn more profit with every
trade when the session is live Brokers Alliance - Life Insurance Services for Agents.
