1. What is Margin Calculation By Zerodha?

Definition: This calculator estimates the margin required for trading based on the contract value and margin percentage.

Purpose: It helps traders determine how much capital they need to maintain in their account for specific trades.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• Margin — Required margin amount (currency)
• Contract Value — Total value of the trading contract (currency)
• Margin % — Percentage required as margin (percentage)

Explanation: The contract value is multiplied by the margin percentage (divided by 100) to calculate the required margin amount.

3. Importance of Margin Calculation

Details: Proper margin calculation ensures traders maintain sufficient funds in their account to cover potential losses and meet brokerage requirements.

4. Using the Calculator

Tips: Enter the contract value in your local currency and the margin percentage required by your broker. All values must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: What is contract value?
A: The total value of the trade, calculated as (number of shares/lots × price per share/lot).

Q2: How do I know the margin percentage?
A: Your broker (Zerodha) provides margin requirements for different securities and trading segments.

Q3: Does margin requirement change?
A: Yes, brokers may adjust margin requirements based on market volatility or security-specific factors.

Q4: Is this calculator specific to Zerodha?
A: While designed with Zerodha in mind, the calculation method applies to most brokerage margin requirements.

Q5: What's the difference between initial margin and maintenance margin?
A: Initial margin is required to open a position, while maintenance margin is the minimum required to keep it open (usually lower).