In intraday trading, what is the margin facility?
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Intraday trading involves taking advantage of the price fluctuations of stocks by opening trade positions, according to the trend. There is no exchange of securities and delivery taken or provided. Now, to be able to do volume-based trading to enhance your gains, you will be required to put in big capital for each session. This may not always be feasible and can make you miss out on lucrative opportunities.
Intraday trading margin is a facility that allows you to take positions on stocks that would have been beyond your financial means. Intraday margin is the fund loaned to you by the broker, to continue trading in large volumes.
By day trading on margin, you can take advantage of the surplus amount offered by the broker to take substantially bigger positions and aim to maximise your profits. Usually, the margin facility is offered by brokers in lieu of the shares as collateral. Eventually, you will need to repay the amount borrowed and the interest applicable on it, to square off your accounts.