What is blocked delivery margin in angel broking
What is blocked delivery margin in angel broking?
Blocked delivery margin is a term used in the context of trading in the Indian stock market. It refers to the amount of margin money that is blocked by a broker to cover any potential losses that may arise from a client's trading activity.
Angel Broking is one of the leading brokerage firms in India that offers a wide range of services to its clients, including online trading, research and advisory, and investment management. As part of its trading services, Angel Broking provides its clients with a blocked delivery margin facility, which is designed to help them manage their trading risks more effectively.
When you place an order to buy or sell a stock, your broker may require you to deposit a certain amount of margin money as a security against any potential losses. The margin money is usually a percentage of the total value of the transaction, and it is calculated based on the volatility of the stock and other market conditions.
Blocked delivery margin, also known as the margin blocked for delivery trades, is the amount of margin money that is required to be deposited by a trader to initiate a delivery trade. A delivery trade refers to a transaction in which the shares bought or sold are actually delivered to the buyer or seller, respectively, as opposed to an intraday trade, where the shares are bought and sold on the same day.
The blocked delivery margin is calculated based on the value of the shares to be traded, the volatility of the stock, and the trading history of the client. The margin money is blocked by the broker until the delivery of the shares is completed. Once the shares are delivered, the blocked margin is released back to the trader.
The blocked delivery margin is a safety net for the trader and the broker. It ensures that the trader has enough margin money to cover any potential losses that may arise from the transaction, and it also protects the broker from any default or settlement-related issues that may arise.
Angel Broking offers its clients a blocked delivery margin facility that is linked to their trading accounts. This means that the margin money is automatically blocked by the broker at the time of the transaction and released once the delivery of the shares is completed.
To avail of the blocked delivery margin facility, traders need to maintain a minimum balance in their trading accounts, as specified by the broker. They also need to ensure that they have sufficient margin money in their accounts to cover the blocked margin, failing which the broker may close out their positions.
Conclusion
The blocked delivery margin is an important aspect of trading in the Indian stock market, and it plays a crucial role in managing trading risks. Angel Broking's blocked delivery margin facility is a useful tool for traders who want to trade in delivery-based transactions, and it helps them manage their margin requirements more efficiently. However, traders should always be aware of the risks involved in trading and should have a sound understanding of the market before placing any trades.
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