Most of us at some point have regretted on losing a good short term online trading opportunity due to insufficient funds in our trading account. We at TradeSmart realizing this requirement of most traders have introduced EquiMax funding facility for all our clients in the Equity Segment.
How Equimax funding facility works in online stock trading?
So, what is EquiMax?
EquiMax allows you to buy more stocks in delivery than you’d normally be able to with the same amount of cash in your online trading account.
For example: If you want to buy shares worth Rs 4 lacs in delivery, you can do so by paying only Rs 1 lac in margin.
Before enabling EquiMax for your account there are few details which you need to know:
- Margin required/Exposure limits: EquiMax will enable you to get a higher exposure for delivery. You can buy delivery upto 4 times of your cash balance. For example, if you have Rs 100 in your trading account you can still buy stocks upto Rs 400.
- Segments: EquiMax will currently be available only for NSE Cash segment.
- Delayed Payment Charges: These charges will be applicable at 0.05% per day on the total ledger debit. If there is no ledger debit at the end of the day, no interest will be charged.
- Trading Platform: It will be available for all NEST trading platforms (Desktop, Mobile and Browser).
- Min balance and Maximum Limit: To avail EquiMax, your ledger balance must be a minimum of Rs 25,000. The maximum available funding per client has been limited to 20 lacs. EquiMax is all about leverage and leverage is a double edged sword, amplifying profits & losses to the same degree, resulting in huge losses if the market moves against expectations. By putting these limits our intention is to protect our clients from any unintentional risk.
- Brokerage Plans: EquiMax is being offered for 0.007% (Value Plan) and Rs 15 (Power Plan) brokerage plans only.
- Subscription charges: There will be an annual subscription fee of Rs 1000 + service tax (Service tax shall be replaced by GST @18% with effect from 1st July 2017) in order to enable this service.
- Product type to be chosen for placing the order: The order will have to be placed with the product type NRML and squared off as NRML as well. Shares bought with product type MIS or CNC can be converted into NRML on the same day itself and vice versa. However, if you have a carry forward position in NRML which you desire to convert into CNC then you will have to first square-off the existing position with product code NRML. Then you’ll have to take a fresh position in CNC.
- Corporate Action: In case of any corporate action in the stocks bought in NRML the corporate action benefits (except rights issue) will be transferred to your account. In case of a bonus/split, the additional shares will be delivered to your holdings (Portfolio in BOX) which you can sell in CNC to release the margin blocked. Since the stocks will be transferred to your holdings you’ll not be able to get the margin benefit for the same and 100% margin will be required for these shares.
- Risk Square-off: As a stock broker we take it as our responsibility to act as a stop-loss to minimize your losses in case the market moves against your expectations while other stock broker failed to do this. Hence, the positions may be squared-off from our side if 50% of your margin gets eroded due to MTM loss.
- Number of days the position can be open: Positions can be kept open subject to the quarterly settlement requirements as per the SEBI guidelines i.e. the account needs to be settled once in a quarter.
- Demat account: To avail EquiMax funding facility for your trading account, you should have a demat account with us, so that the pay-in and pay-out of shares is convenient and seamless.
How to view your EquiMax positions?
You could view your EquiMax positions through a separate report in BOX.
In the trading platform, EquiMax Trading positions will not be available under holding. The positions will be displayed separately.
Stock wise limits for EquiMax
List of stock wise limits for EquiMax trading could be viewed on our website. This list and the margin required would be updated periodically. For further details on margins and exposures please refer our knowledge base.
I am interested, how to proceed?
To enable your account for EquiMax funding facility, please login to BOX and follow the below simple steps:
Go to the EquiMax tab
Read and accept the terms and conditions and click on the Enable Button.
An email will be sent to you with a link to confirm the activation of EquiMax. Click on that link.
After this a confirmation email will be sent to your email id on activation of EquiMax.
We are very excited to launch this facility and will continue to add additional features. Please feel free to post your queries/suggestions in the comments section below and we shall make sure that they are answered at the earliest.