what is margin money. what is the purpose of keeping margin money in banks. ?
thanx.
The concept of margin money applies to trading in shares and commodities.. It is the minimum or prescribed amount which a trader must have in his bank a/c to trade in shares or commodities(gold, silver, crude oil etc..) As the share market or commodities market keeps on fluctuating, ur Investments value also fluctuates... If it falls below ur margin amount limit u will have to pay the broker to compensate the fall and attain margin limit......
So it is always advised to keep ur margin limit amounts above the prescribed limts by exchanges... In such cases fluctuations are taken care of by margin money that u have... then broker will not ask u to pay . It wiil be adjusted in ur margin money....
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