Margin Trading in Share Market
What Is Margin Trading? How Does It Work?
In online share trading, traders buy and sell beyond their resources. This is carried out by borrowing or lending securities wherein a trader puts in a margin with the mediator, which is a percentage of the value of the transaction. This experience is known as margin trading.
The initial margin, which is the minimum amount to be paid, is set at 40% of the value of the stocks to be purchased. In comparison, the maintenance margin, which is at 50%, is the minimum amount of the security valued at 50% or more of the total value of the margin account.