+ Expand AllMargin Finance FAQs

  • QFor whom is this facility available?
    This facility is available only for online trading customers.
  • QWhat are the benefits of using Margin Trading (MF) facility?
    As Kotak Securities provides funding for the shares bought by you, you need to pay only part of total value of shares bought. E.g. If you buys Infosys worth Rs.1,00,000/-, you are supposed to pay 50%* i.e.Rs.50000/- and balance Rs.50000/- will be paid by Kotak Securities on behalf of you at the time of pay-in.

    * % of the Margin may vary from time to time.
  • QWhat is the rate of interest being charged for using Margin Trading through Kotak Securities Ltd.?
    Click here to view the rate of interest
  • QWhat are the margin requirements, while trading under Margin Trading?
    Currently 50% Initial Margin is required, for taking any position under Margin Trading and once the positions are taken then 40% Maintenance Margin is required.
  • QCan we transfer stocks to fulfill the margin requirements?
    No, stocks cannot be provided as security for fulfilling margin requirements.
  • QWhat will happen if I do not have Initial Margin in cash?
    You will not be allowed to buy any securities under Margin Trading.
  • QWhat will happen if a client does not maintain Maintenance Margin?
    In case margin falls below the limits prescribed for Maintenance Margin, Kotak Securities Ltd. will make a Margin Call and the position can be liquidated.
  • QWhat if I am not able to meet the Margin Call?

    Kotak Securities Ltd can liquidate the securities if the client fails to meet the Margin Call made or fails to transfer funds. Margin call/ liquidation can be made at any point of time when margins are not in place.

    Kotak Securities Ltd. can also liquidate the securities in case the client's deposit in the margin account (after adjustment for mark to market losses) falls to 30% or less of the latest market value of the securities, in the interregnum between making of the Margin Call and receipt of payment from the client.

  • QHow can I check my Margin Trading positions?
    A detailed report giving the Margin Trading positions and the related Margins is available under Margin Report in Equity of the trading section - Margin Report.
  • QHow can I take Margin Trading positions?
    While placing the order, select 'Margin Trading' as the 'Order Type'.
  • QIs Short-Selling allowed in Margin trading?
    No, Short – Selling is not allowed in Margin Trading.
  • QDo I need to allocate money separately for Margin Trading?

    No. System will internally move money between Margin Trading and Non Margin Trading based on the orders placed and the executed trades.

    The settlement payment has to be made on T+2 basis i.e. before 3.30 pm on the Pay-in Day of the transaction. Failing to do so we will be compelled to liquidate your entire position/ stock, which will be at the sole discretion of Kotak Securities. At any point of time customers are also required to maintain a cover of 25% against the exposure.

  • QCan I trade in all scrips using Margin Trading ?
    You can trade in all the scrips that are approved by SEBI and Kotak Securities Ltd. The list of scrips, which are covered under Margin Trading facility for NSE, are available in the logged in section Customer Care > Important Messages. Any scrip, which is not included in the said list, shall not be funded but will be available for Non-Margin Trading positions where clients will have to clear debits in T+2 days.
  • QHow long can I carry forward the debit/ outstanding amount in my account?
    Debits can be carried forwarded, till the time the value of the stocks bought under Margin Trading, remains above 50%. In case if the value starts depreciating, you will have to transfer the funds to remain above 40% maintenance margin, else, Kotak Securities Ltd. can liquidate the position, held by you (to cover the required %). However, Kotak Securities Ltd. reserves the right to call back funds by giving you a suitable loan recall period.
  • QCan I sell 100% shares on the next day, bought on previous day under Margin Trading?
    Yes. You can sell 100% shares the next day, of the stock bought on the previous day by selecting "Margin Trading" as 'Order Type'.
  • QWhat are the brokerage charges for buying/ selling using Margin Trading?
    Brokerages are same as applicable for normal delivery/ square off transactions (slab based). However, for calculating the Final Delivery and Square off trades for the purpose of brokerage, the Margin trading as well as Non Margin Trading trades will be considered.
  • QHow can I avail Margin Trading facility & what are the documentation formalities?

    You need to sign the Margin Trading Agreement and Stamp Paper to avail Margin Trading facility. You are also required to have cash balance of Rs.5 lakhs in your account. In case you wish to register against the stocks in your account, you need to sell the stocks to create the requisite margin and then register for Margin Trading.

    Kindly get in touch with your nearest branch for further details.

  • QHow will my limits for trading to be calculated, while using Margin Trading facility?
    For Margin Trading facility, margin requirement would be 50% i.e. 2 times exposure is available. It is calculated as the Available Cash Balance less realized and unrealized losses (if any) less option premium (if any) less MF utilization.
  • QIs Deemed Ledger Credit included in Margin available for Margin Trading?

    No. Deemed ledger credits provided in the case of BNSTG trades and Actual Profits will be ignored in the calculation of the margin available for Margin Trading trades till such time as the entry for the same does not appear in the ledger.

    In effect thus, the only margin available for the Margin Trading trades will be the Ledger Balance Credit. The balance in the ledger needs to be arrived at after writing back the initial and exposure margin on the F&O trades

  • QCan I sell the shares by using BNST-G facility previously bought under Margin Trading?
    No, Shares bought under Margin Trading cannot be sold as BNST-G. Shares bought under 'Margin Trading' can be sold under 'Margin Trading' only.
  • QCan I sell the shares as 'Normal', previously bought under Margin Trading?
    Yes, shares bought under Margin Trading can be sold as 'Normal'. In this case limits will be blocked by the system while placing the order and shares will get adjusted for the pay-in if the shares are there. In this case risk totally lies with the customer itself.
  • QCan I mark 'Margin Trading' as order type later, even if shares are sold without marking?
    Yes, You can mark Margin Trading later (before closure of the market hours on the same day of transaction), in case if sold without marking. Marking would take place only in case if the shares have been bought previously under 'Margin Trading'. By marking for Margin Trading, limits blocked get released instantaneously and fresh position, as desired, can be created.
  • QCan I mark 'Margin Trading' as order type later, even for the shares bought?
    Yes, you can mark Margin Trading later (before closure of the market hours on the same day of transaction), in case if bought under Normal type. However, marking would take place only if there is sufficient Cash Margin at the time of marking to Margin Trading.
  • QCan I square off the transactions under 'Margin Trading' and what will be the brokerage charged in this case?
    Yes, you can square off the transactions under 'Margin Trading', in this case square off brokerage will be levied, but the profits losses will be calculated on FIFO (first in first out) basis. In case of losses, limits will get reduced and in case of profits, funds (profit amount) will be available for trading after the due pay-in/ payout.
  • QCan I buy Non Margin Trading shares, even if I am registered for Margin Trading?
    Yes. You can buy all the shares as approved by Kotak Securities Ltd. Limits will be calculated accordingly to the product and the multiple applicable. The shares purchased will be credited in your Demat account on the next working day after the payout.
  • QCan I trade in Derivatives, even if I am registered for Margin Trading?
    Yes. You can trade in derivatives segment, through Kotak Securities Limits will be calculated accordingly to the product and the multiple applicable.
  • QCan I provide stocks as security for availing limits in Available Cash Balance for trading under Margin Trading?
    No. Stocks cannot be provided as security for availing limits for trading for Margin Trading; the same can be used as margin for taking Non-Margin Trading Positions and derivatives limits. Only cash margin is allowed and hence, client will have to transfer funds to avail this facility
  • QDo I require separate limit to square off the position taken under 'Margin Trading'?
    No, while placing a square off transaction under Margin Trading, no extra limit is required even if the shares are sold in the next settlement.
  • QWill my limits be released after the square off transaction, and can I use it further to take fresh position?
    As soon as you square off the position, your limits would be released and further fresh positions can be created.
  • QWhat will happen to the limits in case of profits or the losses after the position is squared off on same day or on different days?
    In case of profits, funds (profit amount) will be available for trading after the due pay-in / payout. In case of losses, limits will get reduced immediately and further positions can be created according to limits available.
  • QIn all, how will my margins be calculated for all segments for trading provided by Kotak Securities?
    a) For Normal Trades (Non Margin Trading), margin required would be 25%* (for 4 multiple scrips) or 100%* (for 1 multiple scrips)
    b) For derivatives trading, margin required for Nifty would be 10 %*, and for Stocks 25%*.
    c) For Margin Trading, margin required would be 50%.

    *Note: - Trading Multiple may be changed time to time, and is on sole discretion of Kotak Securities Ltd
  • QCan I use Margin Trading for Derivatives trading?
    No. Margin Trading facility is available only for Cash segment.
  • QCan I use same Available Cash Balance for trading in Non- Margin Trading stocks, Derivatives and Margin trading stocks?
    Yes. Same Available Cash Balance can be used for trading in anyone of the segments, but limits available would be as per multiple applicable
  • QHow would the movement of shares transacted under Margin Trading facility, reflect in my Demat account?
    The shares that have been bought under Margin Trading and subsequently sold would be first credited and then debited from your Demat account as per normal pay in and pay out. However, please note, incase you have sold under Margin Trading and bought under Non-Margin Trading in the same settlement, then the net position would reflect in your Demat Account.
  • QAre DP charges applicable, while using Margin Trading facility?
    Yes, DP charges will be applicable as per the normal schedule. Please click here to view the schedule of charges.
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