Margin Calculator

What is Margin Trading?

Margin trading is a powerful financial facility that allows you to purchase significantly more stock or derivative contracts than you would normally be able to afford by borrowing the necessary excess funds directly from your broker. This mechanism exponentially increases your total buying power and can drastically amplify your profits on a winning trade; however, it is a double-edged sword because it equally amplifies your potential losses. The "margin" itself is essentially a good-faith cash deposit required by your clearing broker to initiate and maintain the leveraged position in the live market. Understanding exactly how much capital will be locked up as margin is crucial for preventing account blowups and avoiding the dreaded margin call during sudden, unexpected market downturns.

Understanding Leverage vs. Margin

• Leverage: The ratio of your trade size to your actual capital. For example, 5x leverage means you can control ₹50,000 worth of stock with just ₹10,000.
• Margin Requirement: The percentage of the total trade value you must provide in cash. Using the 5x leverage example, your margin requirement is 20%.

Important Risk Warning

While high leverage (such as 10x or custom high multiples) seems attractive, it dramatically increases the risk of a "margin call" or automatic liquidation. If the market moves against you by even a small percentage, your entire margin deposit could be wiped out. Always combine leverage with strict stop-loss orders (as calculated in our Position Size Calculator) to protect your capital.