Knowledge Base

What is equity delivery leverage?

Equity delivery leverage is a type of margin trading that allows investors to buy shares with a portion of their own capital and borrow the rest from their broker. This can be a way to amplify your returns, but it also carries a greater risk of losses.

With equity delivery leverage, you are essentially buying shares on margin. This means that you are only required to put up a portion of the purchase price as a down payment, and the broker will lend you the rest. The amount of leverage you can get will vary depending on the broker and the stock you are buying.

For example, let’s say you want to buy 100 shares of a stock that is trading at Rs. 100 per share. If you have Rs. 10,000 in your trading account, you could buy the shares outright. However, if you use equity delivery leverage, you could only put up Rs. 2,000 as a down payment and borrow the remaining Rs. 8,000 from your broker.

In this example, you would be using 4:1 leverage. This means that you are using Rs. 4 of borrowed money for every Rs. 1 of your own money.

What is Margin Trading Facility?

Margin trading facility offered by Samco Securities that allows investors to buy shares in delivery with up to 4X leverage. This means that if you have Rs. 10,000 in your trading account, you can buy shares worth Rs. 40,000.

How does Margin Trading Facility work?

Margin Trading Facility works by using your existing cash balance as collateral for the borrowed funds. When you buy shares with MTF, a nominal charge of 0.05% per day is applied to the outstanding borrowed capital for each day the amount remains unpaid. This fee is calculated daily, ensuring you only pay for the exact period you utilize the borrowed capital, offering flexibility while you maintain your positions.

Why is Margin Trading Facility useful?

Margin Trading Facility can be a useful tool for investors who want to increase their buying power and take advantage of potential market opportunities. However, it is important to note that leverage can also magnify losses, so it is important to use MTF carefully.

Benefits of Margin Trading Facility

1. Increased buying power: Margin trading allows you to buy more securities than you could with your own cash. This is because you are borrowing money from your broker to finance your purchases. For example, if you have a margin account with a margin requirement of 50%, you can buy Rs.10,000 worth of securities with only Rs.5,000 of your own money.
2. Potential for greater profits: Margin trading can amplify your profits if the securities you buy increase in value. For example, if you buy Rs.10,000 worth of securities and they increase in value by 10%, you will make a profit of Rs.1,000. However, if the securities decrease in value, your losses will also be magnified.
3. Leverage on 500+ stocks: Get leverage in 500+ stocks & ETFs listed in NSE & BSE.
4. No limit on holding period: Get funded for T+Infinity, as long as margin remains with prescribed limits.
5. Lowest interest rate: Pay rate of interest of only 0.05% per day on the outstanding borrowed capital for each day the amount remains unpaid.

Equity Delivery Leverage Stock Wise

Not all stocks are eligible for margin trading. Only the top 500+ stocks are eligible. This is because margin trading is a riskier form of trading, and the exchange wants to ensure that only experienced traders are using it.

Here is a sneak peek of some of the stocks in which margin trading is available:

These are just a few examples, and the list of eligible stocks is constantly changing.

If you are interested in using margin trading, there are more than 500+ stocks in which you can use the margin trading facility.

What are the interest charges in Margin Trading Facility and how to check it?

A nominal interest of only 0.05% per day on the outstanding borrowed capital for each day the amount remains unpaid. Pay rate of interest of only 0.05% per day on the outstanding borrowed capital for each day the amount remains unpaid.

For example: If you have a cash balance of Rs 10,000 and using Margin Trading Facility you bought a delivery position of Rs 30,000, wherein Rs 20,000 is given by Samco as leverage. So, an interest of 0.05% on 20,000 each day the amount remains unpaid.

How to activate Margin Trading Facility?

Clients can activate their Margin Trading Facility by following the below steps:

You must log in to your Samco app or Samco Back Office.

Samco app

1. Click on accounts in the left-hand top corner.
2. Click on “Manage My Subscriptions”
3. Click on “Margin Trading Facility Subscription”
4. Accept the terms and conditions.
5. Pay 1 Rs. as a subscription fee via credit/debit card, net banking or ledger
6. Now you can successfully start using margin trading facility to invest in equity delivery.

Star back office

1. Click on the “Subscription” button on the left-hand side in the menu section.
2. Under sub category click on “Margin Trading Facility”
3. Accept the teams and conditions.
4. Pay 1 Rs. as a subscription fee via credit/debit card, net banking or ledger
5. Now you can successfully start using margin trading facility to invest in equity delivery.

How to place an order using Margin Trading Facility?

1. Then log in to your Samco App
2. Then select the share you want to take delivery of & instead of using product code-“CNC”, use the product code-“NRML”.
3. Then entire the quantity you want to purchase.
4. At last click on the quick trade and your order will get executed.

Note: In the case of Call-N-Trade, kindly inform the Dealer that you are using MTF & ask him to place an order using the “NRML” order code.

In case of stocks bought under MTF subscription stocks bought on the NSE can be sold only on the NSE & stocks bought on the BSE can only be sold on the BSE.

Effects of all Corporate Actions such as Dividends, Splits, Bonus Shares, etc will accrue to the Client i.e. YOU.

How to check positions in app and star back office?

You can check your Margin Trading Facility open position from Samco app and Star back office.

Samco app

1. Login to your Samco app
2. Click on “Portfolio”.
3. Under “My Position” you can see all the order placed on current day under “Day” category and if you toggle to “Open” you can see all the current open positions.

Star back office

1. Login to your Star back office
2. On the home page you will find “Margin Positions” click on it.
3. You can see your open margin position here.
4. You can also have a bird eye view of your position from the “Margin Trading Facility Summary” on the home page next to “Margin Positions”

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