1. What is a Margin Calculator in 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 position (currency)
• Margin % — Percentage required by broker (percentage)

Explanation: The contract value is multiplied by the margin percentage 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 broker requirements.

4. Using the Calculator

Tips: Enter the contract value in your 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: Contract value represents the total value of your trading position (quantity × price).

Q2: How do I find the margin percentage?
A: Zerodha provides margin details for each instrument on their platform or website.

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

Q4: 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.

Q5: Can I trade with less than the required margin?
A: No, your broker will prevent you from opening positions if you don't have sufficient margin.