How can I check my Margin Trading Facility positions
Everyone loves something extra without having to spend the same amount. Whether it is shopping or in the financial market, getting more at the same amount means an increased utilization capacity. The same is with margin trading. It is an effective way for investors to buy more securities without having to pay the whole amount. Once you sell and make profits, you return the borrowed amount to your stockbroker and keep the profits.
The idea is simple yet profitable. However, if you exercise margin trading, you would need to know the answer to the following question: How can I check my margin trading facility positions.
This blog details everything you need to know about managing your margin trading facility positions.
What is a Margin Trade Facility?
Margin trading is a type of investing style that involves buying expensive and over your current budget stocks. It is done by paying only a portion of the total price, and the stockbroker provides the rest. This margin amount is then paid with interest back to the broker. Until then, the broker holds the securities as collateral. If the profit you earn through the sale of the stocks is higher than the margin amount, you earn a profit. If not, you incur losses after settling the margin amount and squaring off the stock positions.
Almost all stockbrokers, along with IIFL, offer their customers the facility to trade on a margin. However, to utilize a margin trading facility, you would have to open a margin trading account.
How to open a Margin Trading Account with IIFL?
You can use your regular trading and linked Demat account to activate the margin trading facility. The activation is normally complete within 24-48 hours. Once that is done, the value of shares in the linked Demat account automatically becomes eligible as a margin based on the previous day's closing value of the stocks. Any dividends received during this period will be credited to your linked bank account, and there is no separate request or formality required for the same.
To open a free Demat cum trading account, you can visit IIFL’s website or download the IIFL demat account app from the app store.
How can I check my Margin Trading Facility Positions?
You can follow the following steps to check your margin trading facility positions in your IIFL margin account:
- If you have taken a margin trading position today, you can navigate to the ‘Positions’ section in your portfolio, and you will be able to see them there.
- If you want to see the margin trading positions taken before today, you can navigate to the ‘Holdings’ section in your portfolio.
- If you wish to see comprehensive Margin Trading Reports, you can visit the reports section in your portfolio.
Margin trading is a great way to increase profit potential by being able to buy more securities when you don’t have the budget at the moment. However, it is always wise to consult your stockbroker and understand your obligations and interest rate before starting a margin trading position.
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Frequently Asked Questions
You can hold it as long as you want, given you fulfil all the legal obligations and pay timely interest on the borrowed amount to your stockbroker.
No, you can not exercise a short-selling trade in Margin Trading Facility.
No, you are only allowed to trade in the cash segment. Hence derivatives trading is not allowed.
Yes, you can. It is called an intraday margin trading facility where you can sell the margin trading positions on the same day.