Margin Intraday Square Off
Trading can be exciting, engrossing and enthralling. And most importantly, it requires a definite and acute skill set to be a successful trader.
After all, understanding the underlying risks and then committing to the trade is hallmark of the successful trader.
MIS empowers you as an intraday trader with a facility that is not only conducive to trade seamlessly, but also intelligent enough to protect your downside (more on it later).
You work hard on your strategies and trading ideas. Then why not make the most of it?
MIS gives you the added advantage of taking exposure on the funds available in your trading account at the time of placing the order. Thus, with the same Rs 100 you can trade more.
What exactly is MIS?
MIS stands for Margin Intraday Square-Off. MIS, as the name suggests, is a facility that can be used only for intraday trading. With MIS, you can trade across segments – cash, derivatives, index options and commodity futures. MIS does the multiplying effect on the balance funds in your trading account.
Can I do multiple trades with MIS?
Yes, indeed! You can take multiple positions across segments (Equity, Commodity & Currency) or may be only cash or derivatives, depending on your preference. After all, nobody knows your trading strategy and objectives better than you.
MIS provides exposure as opted by you. All your trades executed by selecting the MIS product type, will be shown in your MIS basket with real-time unrealized profit & loss.
Key Benefits of MIS
Take a look at the key benefits of MIS
1. The MIS basket advantage
All those open positions in your MIS basket work like a tightly knit basket. It may happen that a certain position in your MIS basket does not perform as expected.
What then? The other positions in your MIS basket could prop up the team.
The performance of your individual trades matters. More important is how the overall basket of MIS positions performs. Unrealized profit in some positions can offset the losses in others. This protects your open MIS positions from getting squared off prematurely.
2. More OTM strikes:
Enjoy benefit of exposure on more Strike Prices while trading in options with the MIS facility – up to 7.5% OTM Strikes now available
3. No mandatory stop loss
Stop loss orders are a good way to protect your downside. You may place a Stop Loss order as per your discretion, however kindly note that MIS provides a unique solution.
When you place an MIS order, our trading system defines a cut-off value. This parameter determines the maximum net unrealized loss that you could incur on your basket of open MIS positions.
The net unrealized loss is the difference between the unrealized profit and unrealized loss across all your current MIS positions. If it breaches the cut-off value at any time, our trading system will immediately commence squaring off all your open MIS positions, thus mitigating further losses.
4. Auto-square off facility
The cut-off value is just the first layer of protection for your MIS team. Our auto-square-off facility provides an extra cushion.
Auto-square-off is that second fielder. Maybe you haven’t placed a stop loss trigger or the cut-off value is yet to be breached. No problem! Auto-square-off will close off any open MIS positions before market close, thereby restricting your loss.
5. Higher exposure
As an intraday trader, you need to analyse the market conditions before taking a position. What if the conditions seem suitable for a smart trade? In that case, MIS could provide the support you need.
As an MIS user, you benefit from higher exposure on select stocks and contracts.
The exposure will be as per peak intraday margin guidelines defined by exchange from time to time
How to trade with MIS
Once you have activated the MIS, it’s time to place your first order. To get started, let’s focus on how the MIS trading process works:
Taking MIS positions
The MIS facility allows you to trade stocks and futures as well as sell options contracts. You can use your margin to set up multiple MIS positions. If you wish, you could even use the entire margin to create a single MIS order.
Simply put, you call the shots. After all, nobody knows your trading strategy and objectives better than you do.
Varying cut-off value
Our trading system defines a cut-off value each time you place an MIS order. This parameter helps keep your downside in check. The cut-off value may vary based on:
1. the margin utilized by all your open MIS positions,
2. the amount of margin available, and
3. our internal risk management policy.
Keep an eye on the cut-off value.
The cut-off value indicates your current exposure to risk. Factor it in while reviewing your trading strategy or planning your next move.
Squaring off MIS positions
The cut-off value is compared to the net unrealized loss in your MIS positions. As long as the net unrealized loss is less than the cut-off value, your MIS positions will remain open. They will get squared off only if the net unrealized loss reaches or exceeds the cut-off value.
In any case, all MIS orders are ‘auto-square off’ orders. If you do not square off the order or the net unrealized loss has not reached the cut-off value, then your position is automatically squared off after 3:20 P.M except index options on expiry days, in case of open equity positions and 10 minutes prior to the market close in case of currency futures (currently available only for USDINR future contract) and 30 minutes prior to the close of trade for the commodity futures.
This double layer of protection is useful while trading in the stock markets.
Give your trades the MIS advantage
MIS enables you to take larger positions as per your risk perception and trading opportunity.
Worried about individual trades? Each trade in your MIS basket contributes to the day’s overall gains, even as the cut-off value and the auto-square-off facility reduce your risk of loss.
With MIS in your arsenal, you may supplement your trading requirements. Plan your trades, time them right, and with the MIS advantage you may be able to achieve your trading goals with confidence.
Have more questions? Click here to find answers.
Disclaimer:
Kotak Securities cannot be held liable for any loss incurred by the client for non-squaring off / delay in squaring off / auto squaring off the positions automatically due to either illiquidity in the particular security or due to technological problems at either Brokers/Exchanges’ end. Further, auto square off orders are placed after 3:20 pm as the market order and orders are matched against the best price at the exchange level. Kotak Securities does not have control over the price ruling in the market when the orders are matched by the exchange. Margin Intraday Square off (MIS) is a product offered by Kotak Securities Limited. Any complaints or disputes pertaining to the same shall not be entertained by Exchanges.
Please read the Terms and Conditions of the MIS product.
- Trading platform
- Access to Research Analysis
- Access to Customer Service
