Margin trading allows you to buy stocks by borrowing money from Angel One. However, it comes with risks like losing more money than you invest if the stock price falls. You may have to deposit more money to maintain your position, and your shares can be sold by the broker if you fail to pay. Margin trading is risky and needs careful understanding before investing.

What Are the Main Risks of Margin Trading on Angel One?

The main risks include losing more than your invested money, margin calls requiring extra funds, and forced liquidation of your shares by Angel One if you can't meet margin requirements.

What Is a Margin Call and How Does It Affect You?

A margin call happens when your account value falls below the required level. Angel One will ask you to add more money immediately. If you don't, they may sell your shares to recover the loan. This can lead to losses even if the market recovers later.

Can You Lose More Than Your Initial Investment?

Yes, because you are borrowing money to buy stocks, if the stock price falls sharply, your losses can exceed your initial investment. You will have to repay the borrowed amount along with interest, which increases your total loss.

How Does Forced Liquidation Work on Angel One?

If you fail to add funds during a margin call, Angel One can sell your stocks without your permission to recover the loan. This forced sale may happen at a loss, affecting your portfolio badly.

Is Margin Trading Suitable for Everyone?

No, margin trading is only suitable for experienced investors who understand market risks and can handle potential losses. It requires careful monitoring and quick action in volatile markets.

How Can You Manage Risks in Margin Trading?

To manage risks, keep enough funds in your account, monitor market movements regularly, avoid over-leveraging, and use stop-loss orders to limit losses. Also, be prepared to add funds quickly if a margin call occurs.