Margin Policy

Wisdom Capital Margin (Leverage) Policy

Leverage facility offered by a discount broker encourages a trader to go for positions of a larger volume. The leverage offered by a broker does not remain consistently uniform, however, is determined by many factors. Long run volatility in the market and the reputation of the stocks are a few of the important determinants that decide leverages offered by a stock broker.

Therefore, according to the availability of the funds and other factors being taken into the notice, the leverage policy of Wisdom Capital is governed. Some of the salient features of the Wisdom Capital leverage policy according to segments include:-

Wisdom Capital Margins at a Glance
NSE Equity
Brokerage Plans Freedom Pro Ultimate
MIS Up to 5X Up to 32X Up to 60X
BO/CO NA Up to 32X Up to 60X
NRML(BTST) 1X Up to 2X Up to 4X
NSE Futures
Brokerage Plans Freedom Pro Ultimate
MIS NA Upto 4X Up to 15X
BO/CO NA Up to 10X Up to 20X
NRML NA 1X 1X
MCX Commodity
Brokerage Plans Freedom Pro Ultimate
MIS NA Up to 6X Up to 10X
BO/CO NA Up to 7X Up to 14X
NRML NA 1X 1X
NSE Currency
Brokerage Plans Freedom Pro Ultimate
MIS NA 3X 5X
BO/CO NA 3X 5X
NRML NA 1X 1X
NSE Options
Brokerage Plans Freedom Pro Ultimate
MIS NA Upto 4X for Writing/Selling Up to 15X Writing/Selling
BO/CO NA Up to 10X for Writing/Selling,
Up to 2X for Option Buying
Up to 20X for Writing/Selling,
Up to 3X for Option Buying
NRML NA 1X 1X
Leverage and Exposures in Equity Trading

As a leading discount broker in India, Wisdom Capital provides trading facility at both exchanges including NSE and BSE in all segments. Below are the mentioned details for exposure and leverages offered by Wisdom Capital for intraday and delivery trading.

Intraday

Under it trading involves opening and closing of the positions on the same day itself. The leverage provided by Wisdom Capital in this section is up to 60 times in Equity. In intraday, trading orders are placed through the products type including MIS/BO/CO. The leverages provided here are as per the brokerage plan selected by a trader and the segment, where, he wish to trade in.

Delivery

The delivery based trading is like buying shares and holding them for a certain period of time. The shares purchased in delivery trading get deposited in a trader’s demat account and they can be hold in the account as long as possible. The characteristics of the leverages offered by Wisdom Capital include.

  • Wisdom Capital offers delivery trading leverage up to 4 times in Equity. The orders are placed through the product type NRML (BTST). Click here to download BTST File.
  • The holdings get squared off by 11 am on the due day.
  • The leverages are provided as per the brokerage plan selected by a trader and the category of stock you are trading in.

You can have a look at our Margin Calculator for leverage in Equity Segment here.

Future & Options Trading in Equity Stocks and Index

The leverage offered in derivative segment depends upon many factors like the type of products selected and the brokerage plan chosen by a client.

Intraday

When the trading in Intraday is being done for the particular day in future and options equity & index, the leverages offered by Wisdom Capital follow as:-

  • Wisdom Capital is providing leverage up to 20 times in Future Contracts in Bracket Order (BO) and Cover Order (CO) and up to 15 times in Margin Intraday Square-Off (MIS), depending upon the brokerage plan chosen by a trader.

  • Whereas, in Option Writing/Selling up to 20 times leverage is provided in Bracket Order and up to 15 times leverage is provided in Margin Intraday Square-Off (MIS) , depending upon the brokerage plan chosen by you.

  • In Option buying up to 3 times leverage is available in Bracket Order (BO).

  • As you know, higher leverages for trading in any segment, especially in MIS (where pre-defined stop loss are not essentially to be placed) has to be used meticulously. Thus, by default up to 10 times leverage in MIS is being enabled on activation of account, as per the brokerage plan chosen. However, if you are an active trader and scalper, it can be increased further, subjected to consent for MTM Square-Off being sent along with welcome letter on account opening.

  • Options Writers/ sellers trading only on days of expiry will be given prescribed margin on pro-rata basis
  • Option premium value is not considered in collateral amount.
Carry Forward

The distinctive features of leverages offered by the Wisdom Capital in equity derivative segment using product type NRML include:-

  • According to the various guidelines mentioned by the exchanges, the full margin, known as the span margin or initial margin plus exposure margin will be required to take overnight position or to carry forward the position till expiry. You need to maintain the stipulated margin as per the exchange on daily basis, to avoid any penalties for short fall.
  • The orders have to be placed in product type NRML.
  • Option premium value is not considered in collateral amount.

You can check our Margin Calculator for leverage in Futures and Options segment here.

Future & Option Trading (Currency)
Intraday

The leverage offered by Wisdom Capital in Future & Option Trading (Currency) in intraday follows as:-

  • Wisdom Capital offers 5 times leverage in currency futures and option writing, as per the brokerage plan selected by the client.
  • The leverages will be available in the product type MIS.
Carry Forward

The features of leverage offered in Carry Forward in currency by Wisdom Capital follows as:-

  • As per exchange’s guidelines, the full margin, which is span margin or initial margin plus exposure margin will be required to take overnight position or to carry the position till expiry. The client needs to maintain the stipulated margin as per the exchange on daily basis, to avoid any penalties for short fall.
  • The orders have to be placed in product type NRML.

You can check our Margin Calculator for leverage Currency segment here.

Future & Option Trading (Commodity)
Intraday
  • Here, a client gets leverage up to 10 times in commodity futures & option writing. The leverage basically depends on the brokerage plan selected by a client.
  • A client need to place orders with the product type as MIS, to avail the stipulated leverage.
  • However, Wisdom Capitals provides leverage up to 14 times in BO/CO type only in Futures.
Carry Forward
  • As per exchange’s guidelines, the full margin, which is span margin or initial margin plus exposure margin will be required to take overnight position or to carry the position till expiry. The client needs to maintain the stipulated margin as per the exchange on daily basis to avoid any penalties for short fall.
  • The orders have to be placed in product type NRML.

You can check our Margin Calculator for leverage Commodity segment here.

Important Points to be Considered When using Leverages by Wisdom Capital
General Points
  • The positions will be squared off after MTM loss of 70%*, without the requirement of a margin call. In case of a loss of 70% of a client funds, the positions will be automatically squared off by Wisdom’s RMS Team.
  • *In case you get a special leverage, the positions will be squared off after 50% MTM Loss. This is done to reduce the risk of the client in cases of high volatility in the market. The market is uncertain. It’s better to play a safe game than repenting later on.
In Case of Special Leverages, Separate Consent for MTM Will be required from a Client
  • The MIS/BO/CO trades need to be squared off on the same day, by a client by 3.15 p.m. In case, a client have not squared off the position, the same will be done by the RMS Team after the mentioned time. In case of currency, it will be done at 4:45 pm whereas when commodity is concerned, the squaring off is done at 11:15 pm in winters and 11:40 pm in summers.
  • Thus, generally the squaring off is done at the time 15 minutes earlier than the market closing time.
  • Although, Wisdom Capital square off all MIS/BO/CO trades automatically after 3.15 pm, the responsibility of squaring off the position lies with a client. If the buying position is not squared off, the same will be converted from MIS to CNC/NRML. This will be squared off by the RMS Team on the next trading day, without the requirement of margin call, if the required fund is not available in the client’s account. However in case of short selling, the responsibility of auction penalty to be paid to exchange lies with the client.
Margin Safety
  • The client has to maintain 25% Margin of Safety* in case of equity delivery. The non-maintenance of the same will lead to squaring off the position/holding automatically by the RMS Team, without the requirement of margin call.
  • The same is done to maintain risk in case of volatility in the market or in the particular stock taken by the client.
  • *Margin of safety = (Net Cash Available *100)/ Total Holdings
  • Net Cash Available = Holdings – Debit in Ledger
Settlement
  • The settlement of all equity trades happens in T+2 days.
  • Whereas, the trades of derivative segments are settled in T+1 day.
  • However, holdings can be sold out in T+1 day at a client’s discretion.
  • Any credit/profit in the account due to trading will be settled as per exchange settlement for the purpose of payout.
Short Selling

Short selling of equity stocks is auctioned at the exchange on the settlement day. Although, Wisdom Capital try to settle the shares in case of availability of shares with it. But in case of unavailability, the auction will take place by exchange and penalty will be levied as per the guidelines listed by the exchange.