What is margin calculation in trading?

Margin calculation is important in the trading of securities like stocks. It refers to the minimum amount you would need to control a larger position size in your trading account. It's expressed as a percentage of the total trade value. For example, if the initial margin requirement is 20% and you want to buy shares worth ₹1 lakh, you'll need to deposit ₹20,000. Use the margin calculator to understand the margin percentage to make an informed decision.

Exchanges and brokers set the margin requirement based on the trading instrument’s historical value. Higher margin requirements mean lower leverage is permitted for that trade.

Margin calculation considers your trade size, margin percentage, account equity and available free margin to determine if you have sufficient funds to open the trades. The goal is to ensure adequate collateral in case the trades move against you.

Trading platforms automatically calculate margin. However, traders should manually check margin requirements for their trades and ensure they always have a sufficient margin buffer. You can use