Check All Margin Calculators
Zerodha offers commodity margin to the traders to support them in earning more profit by trading in the commodity market. The company offers margin on selected commodities which we will discuss in the latter part of this Zerodha Commodity Margin article.
Also Read: What is Commodity Trading?
Zerodha Margin Calculator Commodity
Zerodha provides margin facility to its clients in various trading segments, the commodity trading segment is one of them.
The stockbroker provides the margin on almost 26 commodities. The value of the margin depends on the volatility and the risk factor associated with the commodity.
Like every company, Zerodha also offers margin to those commodities which they think more volatile and traders prefer to trade in that commodity.
But due to the lot size and the price of the commodity, they move backward from doing more trades. The margin gives strength to the traders to do more trades and more profit booking.
The stockbroker offers two types of margin to the commodity trader which are NRML margin and MIS margin.
We assume that you know about the concept ‘margin trading’ and there is no need for further explanation for this particular concept. So, we are moving ahead to the next level of our discussion of the Zerodha Commodity Margin.
Now, it is important to know how a trader can check the margin offered by the company and on which commodity. Furthermore, knowing Zerodha Commodity charges is also very crucial for you to calculate your profits accordingly.
How To Check Zerodha Commodity Margin?
If you want to check the margin level and the commodity offered by the company, you need to go to a simple process. You just need to go to the commodity margin table mentioned below:
You can find the commodity name on the screen right in front of you and on the right-hand side you can get the margin value offered by the company.
If you can not find the commodity you are looking for in the list, you can type that commodity in the search bar and the commodity with its margin value will appear in front of you (If that commodity is available in the list of commodity margin offered by the company).
For example, If you want to get the margin value of SILVER offered by Zerodha, you just need to scroll down the list of the commodities, search for the SILVER and after getting the commodity you can check the margin value in the right side of the screen.
That is the value of margin offered by the company for the commodity ‘SILVER’.
Zerodha MCX Margin:
Zerodha commodity Margin offered by Zerodha has two product types through indices such as MCX:
- Normal (NRML)
- MIS (Margin Intraday Square off)
- Cover order (CO)
Let’s have a quick summary of the above three types of commodity margin offered by Zerodha.
The full form of NRML margin is ‘Normal’. The normal margin orders are used in the derivatives segment to carry forward the position. Once the position is taken as NRML, a trader can hold it till the expiry of the contract.
A trader can use NRML product type in commodity trading if he/she wants to carry the position overnight or till expiry.
By using this product type, a trader remains free from the tension of auto square off as the auto square off may cause a heavy loss to the trader.
As you know that the percentage of NRML margin is almost double than the Intraday margin offered by any trading company. In the same way, Zerodha also offers double NRML margin to the Commodity trader at the company.
However, the name of Zerodha comes under the names of those stockbrokers who do not levy a 5% special margin above the NRML margin.
Hence, the company has the lowest NRML margin for carrying overnight or till the expiry position.
The total number of commodities that comes under the NRML margin category is around twenty-six.
Margin Intraday Square Off (MIS):
The MIS margin stands for ‘Margin Intraday Square Off’. The position/orders under MIS is required to be squared off before 25 minutes of the market closing bell in the commodity segment.
If a trader does not square off his/her trade before the timeline of the commodity derivatives segment, the RMS team automatically square Off the trader’s position.
Hence, if a trader wants to trade Intraday, he can use MIS order and he need not worry about the Square off because the system automatically Squares Off the trade before the above-mentioned time.
Also Read: Zerodha Intraday Margin
Zerodha commodity margin traders can get the MIS margin facility in around 22 commodities.
Here is a quick look:
Cover Orders (CO):
The cover order in a Commodity is placed with a compulsory stop-loss order for higher leverage in comparison of MIS order.
The order is similar to MIS order, the difference is only the stop-loss order used in CO. But BO does a huge favour to a trader, if the market goes against the position, a trader will end up with a limited loss.
All positions open in Cover Order are automatically squared off before 25 minutes of trading day closing.
Zerodha commodity margin (CO) varies according to stop-loss price.
Zerodha commodity Margin: Points to remember
Here are some of the quick facts about Zerodha Commodity Margin that you must be aware of:
- Zerodha Commodity margin is available at a limited number of commodities. The total number of the Commodity is around twenty-six.
- Zerodha commodity Margin trading offers two product types of margin which is NRML and MIS. Both product types have a different level of margin value.
- MIS uses additional leverage (50% of NRML margin) from 10 AM of the trading day to the closing of the same trading day.
- Zerodha does not levy a 5% special margin. So, has the lowest NRML margin requirement for future trading.
- Zerodha commodities margin traders can trade through Bracket Orders (BO) also.
From the above discussion, it is clear that Zerodha offers an attractive margin value to its clients to support them to earn more through the trades. The commodity trader with Zerodha can choose MIS or NRML product type to get margin and make a profit.
Though the broker offers Commodity Margin to a limited number of commodities, the value of the margin is better than the other stockbrokers in the industry.
In case you are looking to get started with stock market investments or using Zerodha commodity margin as such, then let us assist you in taking the next steps ahead: