Zerodha Margin Calculator (July 2020)

Many of us have been using Zerodha for trading stocks, commodities etc using Zerodha. Zerodha charges lowest brokerage and provides a robust platform for trading.

But to leverage that, we often need to know what margins we have got from Zerodha. This post will help you understand

  1. What is Zerodha Margin and how is it helpful
  2. How can you use Zerodha Margin Calculator to boost your trade
  3. Different Types of Zerodha margin Calculators
  4. How to find the exact Margin for any type of trading
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The Zerodha Margin Calculator is an innovative tool designed to calculate the margin available for different scripts offered by Zerodha. It also calculates the number of shares that can be additionally bought through the leverage provided. The Margin Calculator Zerodha helps to calculate margin for various trading segments like Intraday, Delivery, F&O, Currency and Commodity.

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When you login to your Zerodha account, you will land to your dashboard and see your current margins available like below

zerodha-margin
Zerodha dashboard example

This snapshot was taken on Saturday during holiday. Along with your own amount, there are margins provided across various Zerodha Products or Segments that will help you while you trade to multiply your profits. Not only Zerodha, but other brokers also provide such leverage. This provides you leverage to trade but you should also note that this additional leverage can cause losses too, if the script value goes down, totally depending upon you trade.

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Zerodha logo

Also Read: How to calculate Brokerage in Zerodha

What is Zerodha Margin

Margin is the  amount of additional money borrowed from a brokerage firm to buy additional shares. It can be considered as a short term loan from the broker (not sure if broker keeps your securities as guarantee!).

In simple words, it is the act of lending money to the client to buy securities. Hence, they are able to buy more stocks than they can actually afford. If the strategy is applied correctly, It can yield huge profits.

Hence, they are able to buy more stocks than they can actually afford. If the strategy is applied correctly, It can yield huge profits. But if it fails, the client loses his own money and he/she is indebted to the broker as well. It’s better to enter this kind of trading with adequate knowledge and a plan. This is the reason Zerodha Margin Calculator provides you different multipliers for different scripts.

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There are also certain restrictions placed by the Securities and Exchange Board of India on marginable stocks. The brokers are not permitted to purchase penny stocks and Initial Public Offerings as the risk involved with these stocks is high.

Hence, as an advice, you should know your leverage for trading before initiating your buying/selling trades using Zerodha Margin Calculator.

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Types Of Zerodha Margin Calculator

Depending upon the stocks you are trading in, the Zerodha margin calculator equality provides you with different margins.

Zerodha Margin Calculator MIS

  1. In case of MIS trading i.e. Margin Intraday Square Off, the position held by the trader is squared off at the end of the day i.e. before 3:20 pm.
  2. If the position is not squared off by the client, Zerodha does so automatically on his/her behalf.
  3. Zerodha Margin MIS Calculator will provide you margin ranging from 3-12.5 times.

Zerodha Margin Calculator CO

  1. Zerodha provides its users an option to provide cover to their orders, this means, in order to play safe during trading sessions, you can put a stoploss to your trade which helps you cover your trade in case of untimely loss. This is known as Cover Order.
  2. We recommend our users to put stoploss ranging 0.5%-2% while you trade.

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Zerodha Margin Calculator BO

  1. Bracket Order means putting a Target along with the Stoploss with the desired Buying price for your trade. This means a Bracket Order has 3 components –
    1. Buying Price
    2. Stop Loss
    3. Target Price
  2. This strategy is generally used during Intraday trading where traders target leveraging profit booking in short terms within 1%-5% or as per market conditions.

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How to use Zerodha Margin Calculator

The Zerodha Margin calculator is very user friendly tool. The user is merely required to search for the desired script. The margin calculator displays the margin provided on that particular script and the additional number of scripts that can be bought.

zerodha-calculator
Searching your stock to calculate its margin

The user can choose the desired product segment and accordingly search for the desired script while using the Zerodha margin calculator. The calculator helps a trader to keep their accounts stable amidst prevailing market uncertainties depending upon the existing market values and provides an automatic square off system to safeguard against any losses that may arise.

For instance, if you wish to know the margin available for Tata Motors Equity using the Zerodha Margin Calculator, you can go to the equity section in the Zerodha Margin cal. There, in the search tab, type Tata Motors. The zerodha margin calc will display the multiplier and allow you to calculate exact leverage provided for trading.

Zerodha Margin Types

zerodha-margin-terms

Zerodha Equity Margin

  1. CNC Equity Margin
    1. Known as Cash and Carry
    2. Does the delivery based trading of quity.
    3. CNC method does not provide any leverage.
    4. Zerodha does not provide the option of squaring off the position automatically either.
    5. Under CNC, if shares are purchased and sold on the same day, it is considered as intraday trading.
    6. It also does not involve any kind of brokerage charge.
    7. As soon as the stock is bought by the client, it will be delivered to their account and if they are selling a particular stock, it gets debited from their account in case of Equity Delivery.
  2. MIS Equity Margin
    1. Also known as Margin Intraday square off
    2. Timings allowed between 9.15 am – 3.20 pm
    3. Timings can change depending upon Market volatality
    4. Almost 500 stocks eligible for Intraday Margin
    5. Eligible for both Buy/ Sell
    6. Calculate Intraday margin for your stock simply by multiplying it by 10 times to assume the minimum value
  3. Co Equity Margin
    1. Additional leverage for Cover Orders since they are supported by a Stoploss
    2. Eligible for both Buy/ Sell.

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Zerodha Equity Futures Margin

  1. For trading in equity derivatives segment, the clients must ensure that they have sufficient margin in their account. The brokers are required to collect the total exposure and span margin so that the trading can be carried forward to the next trading session.
  2. Along with MIS and CO, you get margins for
    1. NRML (position can be held till expiry provided in the account)
    2. MWPL (Market wise Position Limit)
Calculator TypeMargin
Equity Intraday3X-14X for MIS
Up to 20X for CO and BO
Equity Delivery1X


Zerodha Futures & Options Margin

  1. The Zerodha F&O Margin calculator is designed to calculate margin for option writing or shorting.
  2. The Zerodha Margin Calculator Futures one of the simplest and most efficient tool to calculate margins across various options and futures segments.
Equity Options and FuturesUp to 9X
Approximately 3X-25 X for MIS
Up to 33X for CO and BO

Zerodha Commodity Margin

  1. Provides Margin for MIS, NRML and CO trades.
  2. As an example for finding out margins by using Zerodha Margin Calculator, mentioned below are a few commodities with their respective lot sizes, NRML margin (or Normal Margin) and MIS margin as given by Zerodha
CommodityLot sizePrizeNRML Margin (Normal Margin)MIS MarginNumber of lots that you can buy via NRML marginNumber of lots that you can buy via MIS margin
Aluminium5MT131.85609803049013
Cotton25 bales1576040148N/A24
Gold1KG4705045591422795700
Nickel1500 kgs943.81592667963301

Here NRML stands for normal margin. When the client takes the position as NRML, he/she should have the relevant margin amount in their respective trading accounts. This will permit them to hold the intraday trade futures position or overnight position till the expiry.

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MIS stands for Margin Intraday Square off. When the client enters intraday trading using MIS, they get the benefit of extra leverage which is approximately 50% of NRML margin. The MIS trading bracket opens at 10am and closes 25 minutes prior to the market shutting down.

Zerodha Currency Margin

zerodha-currency-margin
Example from Zerodha.com for USDINR
  1. The India Exchange Board does not permit traders to trade in FOREX.
  2. Lot Size is 1000 and is shared for coming 3 months
  3. However, with the formulation of certain rules and regulations, traders are permitted to trade in certain currencies which offer good returns

What is Span Margin and Exposure Margin

1. Span Margin Zerodha

Span margin is the margin blocked for F&O trading by the broker and calculated basis worst possibility of a one day move for that particular trade.

2. Exposure Margin Zerodha

The exposure margin is a type of emergency edge and is calculated based on the exposure taken. It is collected to prevent a broker’s liability which may arise due to market variations. The Securities and Exchange Board of India has formulated a new set of rules and regulations which mandates the brokers to collect the SPAN margin and Exposure margin from traders.

Hence, users are expected to maintain a good amount in their respective accounts so that they can square off the positions held or avoid any penalties. Span Margin calculations are carried out based on the risk and volatility of basic assets. All these information is clearly mentioned along Zerodha Margin Calculator section on their site.

The main objective of developing SPAN was to identify the largest possibility of loss that any portfolio is likely to suffer. The exposure margin as suggested by Zerodha Margin Calculator is a type of emergency edge and is calculated based on the exposure taken. Span margin does not remain constant.

It continues to change for specific security based on market volatility. Usually, the exposure margin remains constant and it is basically collected for additional security. The brokers are asked to collect SPAN + Exposure margins from their clients to maintain a level of safety over and above what SPAN requires.

Everyone in the market needs to keep the boundary amount in their account called an initial margin calculated using software – Standard Portfolio Analysis of Risk (SPAN). It is also known as the edge of the span. Along with this, an additional edge is collected to protect brokers against any kind of MTM (mark to market) losses that may arise due to frequent market variations. This extra edge is collected by the brokers near the revelation. In the Indian stock market, exposure margin is always charged above the SPAN margin.

Total Range = SPAN edge + Exposure edge

Zerodha Brokerage Charges:

While now you know how to use the Zerodha margin calculator, let me also share basic brokerage charges Zerodha applies.

The Zerodha Brokerage calculator takes into account Stamp Duty by respective states, Securities and Transaction Tax (STT), Goods and Services Tax (GST), Exchange transaction charges, SEBI Turnover fees, etc.

zerodha-charges
Source: Zerodha

For equity trades, Zerodha charges lowest value of –

  1. INR 20 or
  2. 0.03% of total Turnover of trade.

The Zerodha Brokerage Calculator, therefore also helps to calculate the actual profit earned on any transaction after taking into account all the relevant charges.

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Steps to view P&L in Zerodha Console

  1. Login to your Zerodha account using your password and PIN
  2. Click on Reports on top right
  3. Select From Date and To Date for which you want to view the Profit or Loss of your trades in detail
  4. You will arrive at a dashboard view like below
zerodha-charges-summary
  1. Click on Charges and view all charges along with brokerage levied by Zerodha.
zerodha-brokerage

Zerodha Margin Calculator Final Tips

  1. BO and CO orders provide more leverage as compared to others.
  2. The square off time for automatically closing the position is 3:20 pm on any trading day, but can happen in additional 4 minutes basis market volatility.
  3. Whichever trade you’re performing or dealing in, you should always consider using a margin calculator.
  4. The traders should have sufficient balance in their trading accounts to take any market position.
  5. If you do not have the sufficient amount in your account, zerodha automatically squares off your position to save you from any further loss.
  6. Policies can change subject to market fluctuations or variations.

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Zerodha Margin Calculator FAQs

⭐ What is the margin fee?

Margin fee is the fee collected by the broker on the total value of the order.

⭐ How is Zerodha margin calculated?

Zerodha uses an online device called the Zerodha margin calc which calculates the leverage offered across different segments like Intraday, delivery, commodity and currency. It is basically multiplier (2X, 3X, or 5X etc) depending upon the type of script you want to trade.

⭐ How much margin is given by Zerodha?

Zerodha provides a margin in the range of 3 times to 12.5 times. The Zerodha margin cal can be used to calculate margin available on different scripts.

So, margin might vary anywhere between 3 and 13 depending on the stock that you choose to buy or sell.

⭐ How is intraday margin calculated?

Margins are automatically applied in intraday trading. If the money in your account is not sufficient, the system will ask to pay the balance margin amount required for the trade.

In order to avoid these kinds of situations, some stockbrokers like Zerodha give the margin calculator and the brokerage calculator too. Before the market opens you can calculate the margin required and transfer the required money to your account.


⭐ How margin is calculated in trading?

The Indian stock exchanges follow a system of SPAN margin which stands for standard portfolio analysis of risk. That measures at 99% confidence level what amount of loss your portfolio can make. Based on the risk and volatility of the portfolio, the margin is charged accordingly. It’s called Span or initial margin .

Second margin is called exposure margin which is levied based on your overnight position. The exposure margin is usually levied to cover any MTM losses or uncertainty due to market variations.


⭐ Is Zerodha safe?

Zerodha is a safe, reliable and trustworthy broker. It  abides by all the rules and regulations formulated by SEBI.
It does not have any debts and has not been involved in any kind of violation in the past 9 years.

⭐ Does Zerodha give margin?

Zerodha provides margin across various segments like BO, CO and MIS. The leverage offered ranges anywhere between 3-12.5 times for MIS trading.
For Currency and commodity futures, the margin is calculated as 50% of NRML margin and for options and futures trading, it is calculated as 45% of NRML margin.


⭐ Which broker gives the highest margin?

The leverage provided for intraday is almost the same across all brokers. Zerodha, Asthatrade and UPSTOX are amongst the highest margin providers.


⭐ What if I don’t sell my intraday shares Zerodha?

If you don’t sell the shares, it gets squared off automatically. The broker squares off your position if you do not sell the shares before 3:15 pm.


⭐ What is auto square off in Zerodha?

Square off refers to exiting the position which is presently held by the trader. It also refers to closing a transaction. For instance, selling after buying or buying after selling.

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