Share India limits the utilisation of 90 per cent of your deposits towards margin obligations as a risk mitigation measure. This approach ensures a buffer to sustain the margin level above the minimum required, providing resilience against potential market fluctuations or changes in position values. By imposing this limit, we aim to avoid immediate margin calls even if market conditions shift unexpectedly.Additionally, regulatory bodies like the Securities and Exchange Board of India (SEBI) dictate guidelines and constraints concerning margin trading. As a brokerage firm, Share India adheres to these regulations, ensuring compliance to safeguard the interests of traders and maintain market integrity.What is a margin call?A margin call occurs when the value of securities held in a margin account falls below the minimum required amount. It's a demand from a broker or lender for an investor to deposit additional funds or securities to bring the margin account back to the required level. This demand arises due to the decrease in the value of the securities being used as collateral for the borrowed funds in the account. If the investor fails to meet the margin call by depositing more funds or securities, the broker may liquidate some or all of the assets in the account to cover the deficit and bring the account back to the required margin level.
Share India allows me to use only 90 per cent of my deposits towards my margin obligations on uTrade Algos. Why is it so?