Category: Trading

MTF Pledge vs Margin Pledge – Know the Differences

You’ve probably had that moment—spotting a stock that’s about to take off because of good news or strong fundamentals—but when you check your account, there’s just not enough money to grab the opportunity.

Or maybe you have a solid, long-term portfolio of stocks accumulated, and you wish that this portfolio could be used to make some quick moves in Futures & Options (F&O) without having to sell your holdings.

If you’ve been in either of these situations, you’ve probably stumbled upon two terms that brokers use, MTF Pledge and Margin Pledge. They sound almost the same but are complex in nature. They are as different as taking out a home loan to buy your first house versus taking a loan against a house you already own or Loan against property, think of your broker as a bank for a moment.

Let us break down the MTF Pledge meaning and the margin pledge meaning in simple words for a better understanding. This blog will help investors in knowing exactly what is MTF Pledge and what is Margin Pledge.

What is the MTF Pledge?

Margin Trading Facility (MTF) has a characteristic where investors “Buy Now, Pay Later” but only for stocks. It is a facility that lets you buy shares even if you only have a fraction of the money needed. You put down your portion (this is called the margin), and your broker lends you the rest of the amount.

For instance, if you want to buy shares worth Rs.1,00,000, your broker might ask you to pay just Rs.25,000 and the remaining amount of Rs.75,000 is funded. But the stocks that are bought are kept as security with the broker similar to the case of Home Loan where the new house is held by the bank.

This mandatory promise, or “pledge,” is what we call the MTF Pledge. It’s simply a way to secure the loan. It’s important to remember that pledging these shares doesn’t give investors trading power, rather it’s purely a security measure.

How Does MTF Work?

Select ‘MTF’ Option: While you are ready to buy a stock, you need to select options like ‘Delivery’ or ‘Intraday’ whereas also look for another option called ‘MTF’, ‘e-Margin’, or ‘Pay Later’ and select it.
Order Placement: Once you are done with placing your buy order, the brokers platform will take your margin amount from your account, and the broker will add their funds to complete the purchase.
Pledge the Shares: You might get a SMS or email with a link from the depository (CDSL or NSDL) and you had to click it, log in, and approve the pledge with an OTP before 9 PM. But these days this process has been automated by most of the brokers without requiring any OTP or link approvals.

You need to keep a note that since it’s a loan, you’ll pay a small daily interest on the amount the broker funded. So, it is best suited for trades that you plan to hold for a few weeks or months, but maybe not for years.

Use our Margin Trading Facility Calculator

What is the Margin Pledge

Margin pledge works differently as this is for traders who already have a portfolio with stocks, ETFs, or mutual funds and want to put that portfolio to work without selling a single thing.

Here, investors can “pledge” their existing investments to their broker as a guarantee. In return, brokers give you a special trading limit known as collateral margin. You can now use this collateral margin for other trading activities, like for intraday or in the Futures & Options (F&O) market. Here all the shares have your ownership and you still enjoy the benefits of getting dividends, you’ve just unlocked the hidden power of your portfolio.

How does Margin Pledge Work?

Go to Your Holdings and Pledge: You simply log into your broker’s platform (like Zerodha’s Console), head over to your portfolio, and you’ll see an option to “Pledge” your shares. You pick the stocks and the quantity you want to use.
Understanding the “Haircut”: The broker is cautious as the share price might go up or down, so they don’t give a trading limit equivalent to your portfolio instead they apply a small safety discount, called a haircut, to protect themselves. Let’s say if you pledge shares worth Rs.1,00,000 and the stock has a 20% haircut, your broker will give you a collateral margin of Rs.80,000.
Start Trading: This new margin of Rs.80,000 will show up in your account, ready to be used for your next big trade in F&O or for your intraday strategies.

MTF Pledge vs. Margin Pledge

Feature	MTF Pledge	Margin Pledge
Requirement	To buy specific stocks by borrowing money from your broker.	To get a trading limit by using your existing portfolio as a guarantee.
Optional	No, It’s mandatory for every single MTF trade, as per SEBI rules.	Yes, it’s completely voluntary, done only when you need the extra margin.
Pledging	The new shares are pledged	The existing shares and other securities you already own
Funds	You get a direct loan from the broker to complete a purchase.	You get a trading limit (collateral margin) against the value of your assets.
Interest	Yes, you pay daily interest on the loaned amount.	No interest charged on the margin itself. However, there’s a 50% cash rule for F&O trades that you need to follow to avoid interest charges
Usage	Only to buy and hold those specific shares you purchased with MTF.	Can be used for intraday trading, futures trading, and for selling options.
Risks	If the price of that one stock you bought falls sharply, you could get a margin call.	A margin call can come if your whole portfolio’s value drops OR if your F&O trade goes against you.

Conclusion

One should consider MTF Pledge when they have a strong gut feeling or solid research telling them that a specific stock is set to rise in the short-to-medium term and they want to go big on that single idea by leveraging your broker’s funds. On the other hand Margin Pledge is suitable for fast-paced investors of F&O or intraday. Here the goal is not just to buy one particular stock, but to have a flexible and ready source of capital to support all your trading activities. It’s the ultimate tool for making your portfolio work harder for you.

Leverage is a powerful tool, it can amplify your gains, but it can also magnify your losses. Always take a moment to understand the costs and risks before you jump in.

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4	What is Intraday Margin Trading?
5	What is Operating Profit Margin?
6	What is Stock Margin?
8	What is Margin Funding?
9	What Is Margin Trading?
10	What is Pay Later (MTF) & Steps to Avail Pay Later?
11	What is Pledging of Shares?

Frequently Asked Questions (FAQs)

Can shares be sold even when they are pledged?
Absolutely, for a Margin Pledge, most modern brokers let you sell the pledged shares directly and the money from the sale is simply used to cover the margin you were using. MTF Pledge, selling the shares means the loan is being closed, here the broker will take back their loan amount plus any interest, and the rest of the money (profit or loss) is all yours.
What happens if the MTF pledge is not done in time?
Although this system has been automated by most of the brokers, if your broker still uses the old manual OTP system and you miss the deadline (usually 9 PM), your trade might be treated as a normal delivery order, meaning you will have to pay the full amount of the shares.
Do Investors have to pay interest on a Margin Pledge?
No, investors don’t have to pay any interest for getting the collateral margin. However, there’s a rule for F&O trades you hold overnight, i.e. SEBI says at least 50% of investors’ margin must be in cash. If you use more of your collateral margin and fall short on the cash part, your broker will charge interest on that shortfall.
Can MTF be used in Futures & Options (F&O) trading?
No, MTF is designed specifically for buying equity shares for delivery and cannot be used for trading in F&O, currency, or commodities.
Why do brokers apply a “haircut”?
A haircut is just a safety buffer for the broker as stock prices can be volatile. By applying a haircut (a small percentage reduction), the broker ensures that even if the value of your pledged shares drops, they are still protected.

November 11, 2025

Physical Settlement in Futures and Options

Think of a derivative contract as a promise, some promises are settled with cash, where only the profit or loss are exchanged. But others require you to exchange the actual item. In the stock market, this is called physical settlement.

If you hold certain stock contracts until their expiry, you must either buy or sell the actual shares. This can be a huge surprise if you’re not ready, let’s get straight into All About physical delivery in Futures and Options. This blog gives you the essential knowledge about physical delivery in Futures and Options to help you trade smarter.

What is Physical Settlement?

Physical settlement means that when a stock derivative contract expires, you don’t just settle the profit or loss in cash. Instead, the actual shares are transferred between the buyer and seller.

If you have to buy, you must pay the full value of the stock and get the shares in your demat account, this is called taking delivery.
If you have to sell, you must have the shares in your demat account to give away, this is called giving delivery.

This rule only applies to derivatives on individual stocks. Index contracts like the Nifty 50 are always settled in cash, since you can’t deliver an index.

SEBI introduced this rule to make the markets safer and fairer. The main goals were to:

Reduce risks: Knowing you might have to buy shares worth lakhs makes you trade more carefully.
Stop price manipulation: It’s much harder to manipulate prices when you have to actually arrange for shares or full payment.
Align with global standards: This brings the Indian market in line with major international markets.

Positions Marked for Physical Settlement?

If you hold any of these positions until the market closes on expiry day, you are on the hook for physical settlement.

For Futures Contracts

Any open stock futures position at expiry will be physically settled.

A Long (Buy) Future means you must take delivery (buy the shares).
A Short (Sell) Future means you must give delivery (sell the shares).

For Options Contracts

For stock options, settlement only happens if your option is In-the-Money (ITM) when it expires. If it’s Out-of-the-Money (OTM), it just expires worthless with no further obligation.

The exchange automatically assumes you want to exercise your ITM option, so you must act if you want to avoid it.

Obligations

This table makes it clear what you have to do.

Contract Position	Your Obligation at Expiry	Simple Meaning
Long Stock Futures	Take Delivery	You must buy the shares.
Short Stock Futures	Give Delivery	You must sell the shares.
Long ITM Call Option	Take Delivery	You must buy the shares.
Short ITM Call Option	Give Delivery	You must sell the shares.
Long ITM Put Option	Give Delivery	You must sell the shares.
Short ITM Put Option	Take Delivery	You must buy the shares.

How is it calculated?

The final transaction value is not based on your trade price. It’s calculated using a specific price on expiry day.

For Futures: The settlement happens at the Final Settlement Price (FSP), which is the average price of the stock in the last 30 minutes of trading on expiry day. Example: Let’s say you have 1 lot of ABC Ltd. futures (lot size 500 shares). On expiry day, the FSP of ABC Ltd. is calculated to be Rs.1,200. Your obligation is to pay the full contract value, which is 500 × Rs1,200 = Rs 6,00,000, to take delivery of the 500 shares.
For Options: The settlement happens at the Strike Price of your option contract. Example: Let’s say you have 1 lot of an ABC Ltd. call option with a strike price of Rs.1,150. The stock closes at Rs.1,200 on expiry, so your option is ITM. Your obligation is to pay the value calculated using the strike price, which is 500 × Rs 1,150 = Rs 5,75,000, to take delivery of the 500 shares.

This is a crucial point. Your F&O profit might be small, but your settlement obligation could be for lakhs of rupees. Don’t confuse the two.

Contract Type	Settlement Value Is Based On
Stock Futures	Final Settlement Price (FSP) of the stock
Stock Options	Strike Price of the option contract

Settlement Timeline and Deadlines

The physical settlement process starts at the end or during the week of expiry.

The Final Week: In the last four days before expiry, exchanges start increasing the margin required for long ITM options. This is a signal to either close your position or arrange for funds.
Expiry Day: This is your last chance to act, as most brokers have a cut-off time (often around noon) to square off positions. If you don’t act, and don’t have the required funds or shares, your broker will close the position for you to manage their risk.
After Expiry (T+1 Day): The actual shares and funds are exchanged. Shares are credited or debited from your demat account.

Always check with your broker for their specific deadlines, as they can vary from broker to broker.

The Margin Squeeze

To enter an F&O trade, you pay a small margin. But for physical settlement, you need 100% of the contract value, either in cash to buy the shares, or the actual shares in your demat account to sell them.

To manage risk, exchanges force you to face this obligation early. They do this by gradually increasing the margin requirement on long ITM options in the last few days before expiry. This “staggered” margin increase makes traders exit, who can’t afford the full settlement, preventing a wave of defaults on the final day. If you can’t meet these increasing margin calls, your broker will likely close your position.

Conclusion

Physical settlement is a fundamental part of the market that you must respect. Being unprepared can be very costly.

Smart investors shall be aware and shall always know your open stock F&O positions as expiry week begins. Understanding if you need to buy or sell shares if you hold your position, means knowing your obligations and also keeping an eye on margin requirements, as they will shoot up in the final week. And finally act in time if you don’t want to take or give delivery, square off your position before your broker’s cut-off time.

By understanding these simple rules, you can navigate expiry week confidently and avoid any nasty surprises.

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Frequently Asked Questions (FAQs)

How can investors avoid physical settlement?
The easiest way is to close (square off) your open stock F&O position before it expires and before your broker’s cut-off time. For futures, you can also roll over your position to the next month.
What happens if investors have to sell shares that they don’t own?
This is a “short delivery.” The exchange will buy the shares for you in an auction, and you have to pay the auction price plus a penalty, which is often very expensive.
What happens if I have to buy shares but don’t have enough money?
Your account will go into a negative balance, and your broker will charge you interest. The broker can also sell the shares delivered to you to recover the amount. You will be liable for any loss and charges.
What are the charges for physical settlement different?
Yes. Brokerage is typically higher (e.g., 0.25% of the settled value). Also, the Securities Transaction Tax (STT) is much higher, at the rate applicable for equity delivery (0.1% of contract value).
Does this apply to Nifty and Bank Nifty contracts?
No. Physical settlement is only for stock derivatives. All index F&O contracts are settled in cash.

November 11, 2025

List of Best Commodity ETFs in India

In case you have ever questioned yourself about how to hedge your investments against inflation or market fluctuations, one of the alternatives that you can consider is commodity ETFs. They have become a popular investment choice among Indian investors who want to invest in gold, silver and other commodities in a convenient manner without holding them. We will discuss what is meant by commodity ETFs, why they are important and which ETFs are the best in India.

Commodity ETFs – An Overview

A Commodity ETF (Exchange-Traded Fund) lets you invest in a commodity, like gold or silver, in the stock market. Instead of buying physical gold bars or silver coins, you can buy units of an ETF that mirrors the price of that commodity. Some ETFs hold actual physical commodities in vaults, while others track prices through futures contracts. Either way, you get exposure to the commodity’s performance without worrying about storage, purity checks, or insurance. In India, most commodity ETFs focus on gold and silver.

Types of Commodity ETFs

1. Gold ETFs

Gold ETFs are the most popular commodity ETFs in India. They invest in physical gold of 99.5% purity and replicate the price of domestic gold. Each unit usually represents 1 gram of gold, so you can buy or sell them on the stock exchange, similar to shares, without worrying about purity, storage, or making charges.

2. Silver ETFs

If gold feels a little too traditional, Silver ETFs can be a good option. They work just like gold ETFs but track the price of physical silver (usually 99.9% purity). Silver has both investment and industrial demand, which means it can be a bit more volatile, but also offers great growth possibilities when global demand spikes.

3. Futures-Based Commodity ETFs

Some ETFs do not hold physical gold or silver; instead, they invest in commodity futures contracts. This means their returns depend on how those futures perform, which can make them a little more complex to understand. They are influenced by factors like contango and backwardation (basically, how future prices compare to current prices). These are common abroad (for crude oil or agriculture), but still new in India.

4. Multi-Commodity or Basket ETFs

Multi-Commodity ETFs (also called basket ETFs) invest in a mix of commodities like metals, energy, or even agriculture. They do not depend on the performance of a single metal like gold or silver. Instead, they track an index made up of multiple commodities, offering more balanced exposure.

Read Also: List of Best Gold ETFs in India

Best Commodity ETFs in India

Company	Market Cap. (Crores)	Expense Ratio %	52 Week High	52 Week Low
Nippon India ETF Gold BeES	₹29,323	0.80	₹108.69	₹61.67
SBI Gold ETF	₹12,134	0.70	₹112.23	₹62.85
HDFC Gold ETF	₹14,053	0.59	₹112.80	₹63.60
ICICI Prudential Silver ETF	₹9,481	0.40	₹190	₹86
Kotak Silver ETF	₹2,018	0.45	₹178.98	₹81.80

1. Nippon India ETF Gold BeES

One of the oldest and most trusted gold ETFs in the Indian market, Nippon India ETF Gold BeES directly tracks the price of gold in the domestic market. It’s highly liquid and backed by physical gold stored in vaults with an expense ratio of around 0.80%
It is reliable, easy to trade, and a great way to get exposure to gold without worrying about storage or purity.

2. SBI Gold ETF

Managed by one of the largest and most respected AMCs in India, the SBI Gold ETF is another solid option for gold investors. It mirrors domestic gold prices and ensures full backing by physical gold with an expense ratio of around 0.70%. It is considered ideal for conservative investors looking for safety and steady performance linked to gold prices.

3. HDFC Gold ETF

The HDFC Gold ETF combines brand trust with solid tracking performance. It’s known for tight tracking errors and ease of liquidity on the exchange, with an expense ratio of 0.59%. It is low-cost, and strong liquidity makes it a go-to for many investors.

4. ICICI Prudential Silver ETF

If you are looking to diversify beyond gold, silver ETFs are worth exploring. ICICI Prudential Silver ETF gives direct exposure to silver prices and is ideal for investors who believe silver has long-term potential in both industry and investment. The underlying Asset is physical silver, and the expense ratio is 0.40%. It is great for diversification and tapping into the growing industrial demand for silver.

5. Kotak Silver ETF

Another good choice for silver exposure, Kotak Silver ETF provides returns closely in line with domestic silver prices. The expense ratio is around 0.45% and is backed by physical silver and is easy to trade, making it a convenient way to participate in silver’s price movements.

How to Choose the Right Commodity ETF

Choosing the best ETF for you depends on your goals. Below are a few points to keep in mind while choosing an ETF;

Check the expense ratio – Lower fees mean you will get more returns
Look at tracking error – A good ETF should closely mirror the actual price of the commodity.
Pay attention to liquidity – Higher trading volume ensures you can buy and sell easily without big price gaps.
Review AUM (Assets Under Management) – Larger funds tend to be more stable and better managed.
Know what you are investing in – Physical ETFs are simpler, while futures-based ones can be affected by price rollovers.

Read Also: Best ETFs in India to Invest

Taxation of Commodity ETF

Before you invest, you should know how your returns will be taxed because taxes can quietly eat away your profits.

Commodity ETFs, whether they track gold, silver, or a mix of other commodities, are not considered like equity investments. They follow a different set of tax rules.

1. Short-Term Capital Gains (STCG)

If you sell your ETF within 12 months of buying it, your gains are taxed as a short-term capital gain, which means they get added to your total income and are taxed according to your income tax slab.

Example – Suppose you buy a Gold ETF for ₹1,00,000 and sell it after 8 months for ₹1,15,000.
That ₹15,000 profit will be taxed as per your slab, which can be 10%, 20%, or 30%, depending on which income tax bracket you fall in.

2. Long-Term Capital Gains (LTCG)

If you hold your Commodity ETF for more than 12 months, your profit becomes a long-term capital gain, and you pay a flat 12.5% tax on it. Remember, there is no indexation benefit anymore. Earlier, investors could adjust their purchase price for inflation, which helped reduce taxable gains. But under the latest tax rules, that benefit is gone.

Example – Let us say you buy ₹1,00,000 worth of Gold ETF in January 2024. After holding them for about 15 months, you sell them in April 2025 for ₹1,30,000, and you have a profit of ₹30,000.

Since you held it for more than 12 months, it qualifies as a long-term capital gain. So, your tax will be 12.5% of ₹30,000, which equals ₹3,750

3. Securities Transaction Tax (STT)

STT is not levied on Gold, Liquid, GILT ETFs, and some international ETFs. Although STT is levied on other ETFs.

Read Also: Small-Cap ETFs to Invest in India

Conclusion

Commodity ETFs transfer the ancient charm of gold and silver to a new, digital era. They are liquid and can be traded easily, hence being an ideal choice for investors who wish to diversify other than stocks and bonds. However, it is suggested to only invest in known, liquid ETFs of reputable fund houses. And do not forget: while gold and silver glitter, discipline and patience shine even brighter in the long run.

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Frequently Asked Questions (FAQs)

Are commodity ETFs safe to invest in?
Yes, they are SEBI-regulated and are backed by physical assets, which makes them a safe option to invest in.
Do commodity ETFs pay dividends?
No, they only reflect price changes of the underlying commodity.
When is the best time to invest in commodity ETFs?
They work best when invested for the long term and not short-term trades.
How can I track performance?
You can check live prices either on NSE/BSE or your broker’s app anytime.
What is the minimum amount to invest in a commodity ETF?
Usually, the cost is very less, often a few hundred rupees.

November 9, 2025

Bullish Options Trading Strategies Explained for Beginners

Imagine you’re a fruit seller and you have a strong feeling that during the summer season mango prices will shoot up, this means you are “bullish” on mangoes. You could buy tons today, but that’s costly as well as risky, because what if you are wrong.

Instead, you pay a farmer a small token amount and he gives you the right to buy 100 boxes of mangoes from him at today’s price, anytime in the next month. If mango prices double, you can sell them for a huge profit, but what if the prices fall, you only lose a small token amount.

This simple agreement is the options trading. And when investors use it to make profit from rising prices, they are using bullish option strategies.

What Does Bullish Mean in Options?

In the stock market, being “bullish” means you believe prices will rise and go up. Instead of buying a stock outright, you can use options to act on this belief because:

Low Costs: Like our mango example, you can control a large number of shares by just paying a small fee known as ‘premium’.
Lower Risk (for Buyers): If your intuition is wrong and the stock starts to fall, you will only be losing the premium paid.

Types of Bullish Options Trading Strategies

Let’s look at the most common strategies used by investors when they are bullish in the stock market.

1. Buying a Call Option

This is the most direct way to buy stocks during rising prices. In this you only pay a small fee for the right, but not the obligation, to buy a stock at a pre-determined price aka the Strike Price before a specific end date or the expiry date. Investors generally use this when they have strong feelings and they expect a big, fast jump in the stock price.

Advantages

Unlimited Profit: If the stock keeps rising, there’s no limit to how much you can make.
Limited Loss: Your maximum loss is capped around the premium you have paid.

Disadvantages

Time Decay: This is the biggest challenge as the value of your option decreases every single day, like a ticking clock.If the stock doesn’t move up in time, you can lose your entire investment even if you were in the right direction.

2. Bull Call Spread

This is for the smarter investors, where to reduce their initial cost, investors pay for the right to buy at today’s price but also sell the right to someone else to buy at a much higher price. Investors are still bullish on this, but they are limiting their potential profit to lower their initial risk and cost.

In a Bull Call Spread, you buy a call option and simultaneously sell another call option with a higher strike price. The premium you get from selling the second option makes the whole trade cheaper.

Advantages

Lower Cost & Defined Risk: It’s cheaper than buying a call alone, and you know your maximum possible loss from the start.
Reduces Time Decay Impact: Since you’ve both bought and sold an option, the negative effect of time passing is reduced.

Disadvantages

Limited Profit: Because you have already sold a call, your profit is capped. You cannot benefit from instant price rise once you sell.

Example: Bull Call Spread on Nifty 50, lets say the Nifty is at 18,000 meaning you are moderately bullish. You buy an 18,000 Call for a Rs.150 premium and sell an 18,500 Call for an Rs.80 premium. Your total cost is just Rs.70 (Rs.150 – Rs.80). This is your maximum loss. But here your profit is capped, the maximum you can make is the difference in strike prices (500 points) minus your cost (Rs.70), which is Rs.430.

3. Bull Put Spread

In this strategy you get paid upfront for your bullish view. In a Bull Put Spread, you sell a put option (your bet that the price won’t fall) and buy another put option with a lower strike price to act as insurance against a big crash. You receive a net income (a “credit”) for doing this.

Advantages

Upfront Premium: Investors get the money instantly in their bank account.
Profit from Sideways Movement: You can make money in this even if there is no movement in the stock until and unless the stock price starts to fall.
Time Decay: As time passes, the value of the options you sold decreases, which is good for you.

Disadvantages

Capped Profit: The maximum profit you can earn is only the net premium you received.
Higher Losses: The maximum loss is usually greater than the maximum profit.

4. Covered Call

This strategy is not for new traders, but for investors who already own the stock. In a Covered Call, you own the stock and you sell a call option against it. The shares you own are the “cover” for the call option you sell.

Let’s understand this from a quick example, think of it like owning a house, to earn extra money, you decide to rent out the top floor. You get a steady rent (the premium), but you agree that if someone offers a certain high price for your house, you will sell it.

Advantages

Generates Income: Investors can earn a stable income by “renting out” their shares.
Downside Protection: The premium acts as a small cushion if the stock price falls.

Disadvantages

Limited Profit: If the stock price shoots up, your profit is capped. You have to sell your shares at the strike price and miss out on the big rally.
Downward Risk: If the stock price crashes, you still own the falling stock. The small premium you received is much lesser than the loss incurred.

Which Bullish Strategy is Right for Investors?

Choosing the right strategy depends on how bullish you are and how much risk you’re willing to take.

Parameter	Long Call	Bull Call Spread	Bull Put Spread	Covered Call
Market View	“This stock will rocket up!”	“This stock will go up a bit.”	“This stock will not fall.”	“My stock will stay flat or rise a little.”
Maximum Profit	Unlimited	Limited (Defined)	Limited (Net Credit)	Limited (Capped at Strike)
Maximum Loss	Limited (Premium Paid	Limited (Net Debit)	Limited (Defined)	Substantial (Stock can go to zero)
Best For	High-conviction bets on a big, fast move.	Betting on a rise with low cost and defined risk.	Getting paid a premium for your confidence.	Long-term investors wanting extra income.

Conclusion

Options trading is a strategy where knowledge and discipline are utmost required. As a beginner, your first goal should be to secure your capital. Start with paper trading or an amount of money you are fully prepared to lose. Bullish options strategies can be a powerful tool to expand your income, but they also come with attached risks to it. So knowledge and experience with right timing shall always be considered.

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Frequently Asked Questions (FAQs)

Is Bull Call Spread and a Bull Put Spread different from each other?
Yes, with a Bull Call Spread, you pay a small amount (a debit) and need the stock to rise to make money and in Bull Put Spread, you receive a small amount (a credit) and make money as long as the stock doesn’t fall below a certain price.
Shall stocks be bought during the bullish market?
Buying stocks exposes all your investment to direct risk as buying stock requires money upfront and this money can be lost if the price starts to fall. However, Options offer a lower-cost way to trade with a defined, limited risk, but you are also fighting against time decay.
How much money is required to start options trading?
You can start with a few thousand rupees as buying a call or a bull call spread can be cheap, though selling a bull put spread requires a margin from your broker, which can be around Rs.1 lakh or more. A covered call requires the most capital, as you must own the underlying shares first.
What happens if the bullish feeling is wrong and the market falls?
In Long Call or Bull Call Spread, your losses are capped to the net premium you pay. With a Bull Put Spread, your loss is also limited but can be larger than the premium you received. With a Covered Call, you face the full risk of the stock price falling.
Can positions be closed before expiry?
Generally investors prefer to close their positions before the expiry date to lock in profits or cut losses. Waiting until the last minute can be risky as sudden price moves can erase your gains.

November 8, 2025

Best Brokers Offering Free Trading APIs in India

Things are not the same as they used to be when it comes to trading in India. Traders are using automated systems, data-driven strategies, and algorithmic trading these days.

Do you know what is going on behind the scenes of all this technology-driven trading? APIs.

An API lets your code or software connect to your broker directly. If you like coding, you can make your own trading app, automatically place trades, get live data, test your strategies, etc.

In today’s blog, we will discuss about the best broker that offers free APIs in India.

What is Trading API

An API (Application Programming Interface) is like a bridge between your computer program and the broker’s system. You can write your own code, which connects directly to the broker instead of logging into their app to make trades.

Below is what you can do with a trading API:

Access live market data, including order books and price feeds.
Automatically place orders to buy and sell.
You don’t have to log in to manage your portfolio positions.
Apply the algorithms to execute strategies for intraday, swing, or options trading.
Use past data to test your strategies.

Best Brokers Offering Free APIs

1. POCKETFUL

Pocketful is a fintech platform that makes stock investing and algorithmic trading easy for young and tech-savvy people. It is still new to the Indian market, but is already getting attention.

Pocketful’s API is free and made for developers who want flexibility. You can stream market data, make trades, and manage your portfolios without paying anything extra. The setup is easy, and the fact that it supports Python makes it suitable for beginners to use.

2. ANGEL ONE

Angel One’s SmartAPI is a free, developer-friendly platform that lets you automate trading and access live and historical market data. You can place orders, track your portfolio, and build anything from simple scripts to advanced trading bots. It works with REST and WebSocket, supports multiple programming languages, and is suitable for both beginners and fintech developers looking to create automated or copy-trading systems.

The platform also provides real-time updates for multiple market segments, including stocks, options, futures, and commodities. It offers features like automated entry/exit strategies, risk management tools, and GTT (Good Till Triggered) orders. A strong community and support resources help users learn, troubleshoot, and improve their trading systems efficiently.

3. ALICE BLUE

Alice Blue is a discount broker based in Bangalore that has built a good name for low-cost trading and a growing community of active traders. They have also worked with a lot of third-party algorithm platforms.

Their ANT API is free and lets you access live market data, place and manage orders, and examine historical data for backtesting. You don’t have to worry about compatibility, as it works with many languages, including Python and Java. Alice Blue can be a good option for anyone who wants to try automation without extra costs.

4. FYERS

Fyers is a new discount broker in India, but it is evolving rapidly because it prioritises technology. Investors adore them because their platform is updated, and they do not charge any fees for delivery trades.

The Fyers API is free and easy for developers to use. You can get live feeds, place orders, and see historical charts. This is amazing if you want to backtest or make your own dashboards. Fyers is a great choice for algorithmic trading because it works well with Python and has an active online community.

5. KOTAK NEO

Kotak Securities, an arm of the Kotak Mahindra Bank, is one of the biggest names in the broking industry. They established Kotak Neo, a discount trading platform, to keep up with the new wave of traders.

Neo’s free API lets you get market data, make trades, and keep track of your holdings. It stands out because you get the reliability and trust of a big broker without having to pay anything for the API. Although it is quite new, it is definitely worth giving a try.

6. DHAN

Dhan started back in 2021, but it is already gaining popularity among active traders. With sleek platforms, a user-friendly Interface, and a focus on technology, it is built specifically for today’s trading generation.

The Dhan API is free and made for developers. You can get live market data, place orders quickly, use WebSockets, and work with Python easily. The platform is easy to use for beginners, and the start-up process is smooth. Dhan is a great choice if you want algo trading tools without the extra fees or clutter.

7. SAMCO

Samco is a discount broker that has been around for a while. It is known for its flat ₹20 brokerage and easy-to-use trading platforms. It is not as big as Zerodha or Angel One, but it has found a place among traders who want to save money.

Samco gives you free access to its API that lets you see live market data, place orders, and keep track of your portfolio. It is a good choice for anyone who wants to automate simple trading strategies without paying a monthly fee.

8. SHOONYA by FINVASIA

Finvasia’s Shoonya platform is known for being a trading app with no hidden fees, and this alone makes it attractive to retail traders who don’t want to pay high fees.

The Shoonya API is free to use and has everything you need for algorithmic trading, like real-time data, order placement, and portfolio management. Shoonya is one of the best options for cost-conscious algo traders because it has no broker fees and a free API.

9. UPSTOX

Upstox is one of the most popular discount brokers in India, backed by Late. Ratan Tata. It has a visually appealing trading app and competitive brokerage plans, with more than 1 crore customers.

Upstox also have an API. Developers can use it for free and analyse market data and simple automation, but they have to pay for advanced features. If you are new to algo trading and already use Upstox, this is a great way to get an understanding of it before you jump into buying their premium plans.

10. TRADESMART

TradeSmart is an Indian stockbroker that offers discounts. They have built up a loyal group of traders. They are known for their easy-to-understand pricing plans and their focus on making trading affordable.

They also offer free trading APIs, which means you can make your own trading setups or test algorithm strategies without having to pay extra. TradeSmart is a great choice for someone who wants a broker that is easy to use, dependable, and cheap, and helps in automating trades.

Benefits of Using Trading APIs

Not everyone wants to spend thousands to try algo trading. That is where free APIs come into the picture.

Here is why they are helpful,

No upfront cost – You can learn and try things out without having to worry about paying bills every month.
Flexibility – You can set up your own trading systems the way you want.
Automation – This lets you execute trades faster and without getting emotional.
Backtesting – Helps you evaluate your plan on past data before exposing money at risk.
Paper Trading – Some brokers let you practise before you start trading live.

Conclusion

If you like coding or just want to try automated trading, picking a broker with free APIs can be a good choice. Indian traders now have a lot of opportunities. They can choose from well-known names like Zerodha and Angel One or emerging brands like Dhan and Pocketful. The key is to choose the one that works best for you. Keep in mind that an API is just a tool; what matters is how you use it to make your trading ideas real.

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Frequently Asked Questions (FAQs)

Are broker APIs free in India?
Yes! There are so many brokers, like Zerodha, Angel One, Pocketful, Alice Blue, and others, that let you use their services for free, but some may have limits or extra features that cost money.
Do I need to know how to code to use APIs?
If you know languages like Python or JavaScript, you can make and run strategies. Don’t worry; there are many tutorials and community forums to help you.
What is a broker API, exactly?
You can think of it as a bridge between your trading account and your app, bot, or program that lets you place trades automatically.
Can I use free APIs to trade live?
For sure. You can make real trades with most brokers’ APIs, and some brokers also provide paper trading for you to practice first.
Which broker is best for people who are just starting?
Pocketful, Angel One, and Dhan are all good options if you are starting. They all have active communities and easy-to-use platforms.

November 8, 2025

Top Discount Brokers in India

Investment in the stock market includes numerous costs ranging from brokerage charges to statutory taxes. But with the rise of discount brokers, this brokerage cost has been reduced significantly, as it helps various investors to participate in the capital market.

In today’s blog post, we will give you an overview of the top 10 discount broker, along with their key features.

What is a Discount Broker?

A discount broker is a brokerage firm that offers investors and traders to buy and sell different securities, such as shares, bonds, ETFs, etc, on the stock exchange. They charge comparatively lower fees than a full-service broker. Their primary focus is on providing execution only platforms.

Top 10 Discount Brokers in India

Pocketful
Zerodha
Groww
Angel One
Fyers
5Paisa
Shoonya by Finvasia
Upstox
m.Stock
Dhan

Overview of the Top 10 Best Discount Brokers in India

1. Pocketful

Pocketful is an emerging discount broking platform launched by brothers Sarvam and Rishabh Goel under Pace Stock Broking. Backed by more than three decades of industry expertise, it is quickly positioning itself as a growing player in the stockbroking space. The platform offers a wide range of services, including stock and commodity broking, along with zero delivery charges, free account opening, and no annual maintenance fees, making it highly attractive for cost-conscious investors.

Key Features:

Zero Account Opening Charges: There are no account opening charges for opening a demat account with Pocketful.
Margin Facility: It offers a competitive margin facility to its clients.
Interest Rate: It offers the lowest interest rate on MTF Trades i.e. 5.99%.
Free APIs: Pocketful offers free algorithmic trading APIs for tech-savvy investors.

Why choose Pocketful?

Pocketful is a modern, low-cost stock trading platform which is helpful to both new and experienced traders. It doesn’t charge any fees to open an account, an AMC for Demat accounts, and offers free equity delivery trades, which makes it extremely affordable.

2. Zerodha

Zerodha, a major Indian brokerage firm, has made big changes to the country’s online stock trading and investing platform. Nithin and Nikhil Kamath started Zerodha in 2010. In 2019, it became India’s biggest retail stockbroker, with more active clients than any other company. Account maintenance fees, brokerage fees on trades (intraday, F&O), and other services are Zerodha’s primary sources of income.

Key Features:

Advance Trading Platform: Zerodha offers a robust trading platform for its traders that is equipped with advanced trading tools.
Low Brokerage: It offers flat fee and discounted brokerage which helps them grow their business rapidly.
Educational Content: There are various educational content offered by Zerodha to help beginners learn trading.

Why choose Zerodha?

Zerodha is the best broker for thousands of Indian investors because it has an economical brokerage model and cutting-edge technology. It is a great choice for both new and experienced traders.

3. Groww

Groww is an Indian fintech company that makes online stock, mutual fund, and other financial product investing easy and affordable. Groww is a significant player in the discount brokerage industry since it has developed into a full-fledged brokerage service. More experienced traders can benefit from Groww’s features, which include real-time market data, advanced charting with numerous technical indicators, and a portfolio analysis tool to monitor their allocation and performance.

Key Features:

Centralised Platform: Groww provides IPOs, ETFs, digital gold, US stocks, direct mutual funds, stocks, futures & options (F&O), and more from a single app.
Paperless Account Opening: Groww offers a digital onboarding process. One can easily open their account online.
Calculators: Groww offers numerous tools for financial calculation, including SIP, lump sum, etc., calculators.

Why choose Groww?

Groww trading platform is a great option for today’s investors because of its affordability, along with a simple application. It reduces the entry barrier, especially for new investors, with paperless account opening and no fees for opening a Demat and trading account.

4. Angel One

As a key player in the Indian discount broking industry, Angel One has transformed from a full-service broker to a tech-driven discount broker that provides a range of value-added services in addition to the benefits of a discount brokerage. The Angel One platform’s extensive range of products allows users to diversify their portfolios.

Key Features:

1. Advisory: A rule-based advisory tool is provided by Angel One, which provides research-based recommendations.

2. Advance Charts: It provides intra-day charts, historical data, and a variety of indicators for advanced charting.

3. Multiple Assets: Along with the equity, it also offers investment in mutual funds, commodities, etc.

Why choose Angel?

Angel One is a great option for both novice and experienced investors due to its attractive combination of affordability, scope, and smart advisory tools. Their advisor tool provides a customized investment recommendation based on the investor’s needs.

5. Fyers

Fyers is a discount brokerage that started in 2016. The name of the company means “Focus Your Energy and Reform the Self.” Fyers is an Indian discount stockbroker that is known for its strong platforms that focus on technology. Fyers has teamed up with TradingView, which is one of the most well-known charting platforms. This gives users access to advanced charting tools, technical indicators, and drawing tools right in the app.

Key Features:

Low Cost: The services offered by Fyers are very low compared to other full-time brokers.
Learning: It also offers learning for the investor through its “School of Stock” course on the stock market.

Why choose Fyers?

Traders and investors who want a tech-savvy, low-cost broker should definitely consider FYERS. The platform was made in-house and has a lot of features, like advanced charting tools (more than 100 indicators), the ability to change orders on a chart or by dragging and dropping them, and access to historical and intraday data.

6. 5Paisa

One of India’s first flat-fee brokers, 5paisa Capital Limited, was established in 2016, and its headquarters are located in Mumbai. It was supported by the IIFL (India Infoline Group) and offers a range of online financial services. In 2017, 5paisa went public on the BSE and NSE following its separation from its parent company, IIFL. As a complete investment platform, it has expanded over time to encompass mutual funds, insurance, digital gold, loans, and robo-advisory in addition to stock trading.

Key Features:

Low Brokerage: 5Paisa offers low and flat fee brokerage to its clients, along with other additional benefits.
Wide Range of Products: It offers a diverse range of products, including mutual funds, ETFs, and insurance.
Research: Along with the discount broking services, it also offers comprehensive research reports on various stocks and commodities.

Why choose 5Paisa

The platform is an all-inclusive platform for investments. It allows you to buy stocks, bonds, mutual funds, insurance, gold, US stocks, and more.

Portfolio analytics tools (like Portfolio Analyser), research support and a quick, paperless account opening process are also helpful for users.

7. Shoonya by Finvasia

Sarvjeet Singh Virk and Tajinder Virk started the Finvasia group in 2009. Shoonya is the group’s discount broking division. In 2016, the group started the first trading platform with no fees. The company offers users a lot of services for no cost, like trading, clearing fees, technology fees, and more.

Key Features:

Advance Trading Tools: Finvasia allows its investors to use advanced trading tools through their mobile application.
Mutual Funds: One can easily invest in mutual funds through Finvasia.
Zero Account Opening: There are no account opening charges for opening a demat account with Finvasia.

Why choose Finvasia?

Finvasia’s Shoonya platform stands out because it offers zero brokerage on equity delivery trades, while futures and options and currency trades are charged at ₹5 per trade or 0.03% of the trade value, whichever is lower, which makes trading much cheaper for investors. Shoonya is one of the few brokers that lets traders use algo-trading or APIs for free or with limited restrictions.

8. Upstox

Most people know Upstox as RKSV Securities India Private Limited. It is one of the best trading platforms in India. Ravi Kumar, Raghu Kumar, and Shrini Vishwanath started it in 2009. In 2016, the company changed its name to Upstox to better reflect modern technology. In 2019, CDSL rewarded the company to open 100,000 demat accounts in a month.

Key Features:

Advance Order: Through the mobile application provided by Upstox, one can execute an advance order, such as GTD, AMO, etc.
Integration of Tools: Upstox offers integration of an advanced trading API.
Transparency: They also provide a brokerage calculator tool, which helps in calculating the brokerage which one needs to pay while executing a trade.

Why choose Upstox?

Upstox is an excellent choice for both new and experienced investors because it has low prices, cutting-edge technology, and access to a wide range of securities. All of these things make Upstox a great choice for people who want a low-cost, tech-savvy, and flexible brokerage without giving up tools or options.

9. m.Stock

m.Stock is a part of Mirae Asset Capital Market, which allows you to buy and sell stocks at a lower price. This platform was launched in 2022. Mirae Asset Capital Market is a division of the South Korean financial firm Mirae Asset Financial Group. It has a wide range of products, including stocks, futures, options, ETFs, and more.

Key Features:

Margin Trading: m.Stock allows its consumers to use a margin trading facility, through which they can fund their investment.
Comprehensive Product: m.Stock offers their investment a comprehensive range of investment products.
Advance Trading Platform: They offer an advanced trading platform which offers voice-based search.

Why choose m.Stock

For investors who want to keep trading costs minimal without giving up advanced features, Mirae Asset’s m.Stock is a good choice. Traders have a better trading experience when they use platforms that have advanced charting, option chain analysis, basket orders, voice search, and real-time market data.

10. Dhan

Dhan is a discount broking platform that uses technology and was started in 2021. The company gives traders a margin. The company also has many advanced trading tools available. Through its app, you can also invest directly in a mutual fund. Dhan does not charge any fees to open a demat account.

Key Features:

Zero Brokerage on Delivery: No charges on equity delivery trades.
Low-Cost Intraday & MTF: Just ₹20 or 0.03% per order (whichever is lower) for intraday and MTF trades.
Advanced Trading Tools: Access TradingView & ChartIQ charts, option chain analysis, basket orders, and scanners for smarter trading.

Why Choose Dhan?

Dhan combines zero-cost delivery investing with flat, low brokerage for intraday and margin trades. Along with powerful features like real-time charts, option analytics, and algo-trading via webhooks, it offers a seamless platform suited for both long-term investors and active traders.

Advantages of a Discount Broker

The key advantages of a discount broker are as follows:

Economical: The low cost is the most important benefit. The majority of discount brokers don’t charge a fee for equity delivery trades and instead charge a flat fee.
Advance Trading Application: Discount brokers offer platforms like mobile apps and web terminals, which are fast, reliable, and come with advanced charting tools and real-time data.
Multiple Assets: The discount broking firm offers an application through which one can invest in multiple asset classes, such as commodities, etc.

Limitations of Discount Broking

The key disadvantages of a discount broker are as follows:

No Recommendations: Discount brokers generally do not give advice or recommendations on any stock. They tend to offer only a trading platform.
No Offline Support: Discount brokers do not have any local presence, hence are not able to provide offline support.
Lack of Wealth Management: They do not offer services like wealth management, tax planning, etc.

Read Also: Best Mobile Trading Apps in India

Who should choose a Discount Broker?

The following types of traders can opt for a discount broker:

Economical Investor: Discount brokers are great for those who want to save money on brokerage fees and don’t need high-end advisory services.
Tech-Savvy Investor: Investors who are comfortable using mobile apps, web platforms, and advanced charting tools can benefit from using discount broking services.
DIY Investor: Investors who do not need any advisor services can consider opening a demat account with a discount broker.

Conclusion

On a concluding note, picking the right discount broker can make a big difference in your trading journey, especially when it comes to saving money and getting access to technology-driven platforms. Each broker has its own strengths, such as lifetime zero brokerage, powerful margin facilities, or cutting-edge trading platforms. However, some discount brokers do not offer advisory and research reports. Hence, before choosing a suitable broker, one should consult their investment advisor.

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Frequently Asked Questions (FAQs)

Which is the best discount broker in India?
Currently in India, Pocketful is considered the best discount broker, followed by Zerodha.
Is it safe to open a demat account with a discount broker?
Yes, it is absolutely safe to open a demat account with a discount broker, as they are registered with SEBI.
Do discount brokers provide recommendations and advice?
Not all discount brokers provide advisory and recommendations on stocks and other assets. Only some of the discount brokers do this.
Do discount brokers have local offices?
No, discount brokers do not have local offices in multiple cities. They only provide a trading platform and have a central office.
What is the difference between a full-service broker and a discount broker?
A full-service broker offers comprehensive research, financial planning, wealth management, and broking services. Whereas a discount broker only offers brokerage services.

November 7, 2025

Best Charting Software for Trading in India

Intraday trading requires decisions to be made in minutes and seconds. That’s why having a platform like the best charting software India that displays data instantly is essential. When market movements are fast, a lack of real-time data, unclear charts, and a slow refresh rate can cause significant losses. Monitoring technical indicators, changing price patterns, and live volume changes can help you make the right entry and exit decisions. In this blog, we’ll explore the charting software and trading software in India that are reliable, quick, and feature-rich for intraday traders.

What is Charting Software?

Charting software is a specialized trading tool that presents price and volume data for a financial instrument (like a stock, index, commodity, or currency) in graphical form.

Its purpose is to help traders understand the full price movement rather than simply looking at numbers. It offers different chart types (eg. candlestick, line, and bar charts) and dozens of technical indicators (eg. moving averages, RSI, and MACD) that help identify market direction, trends, and potential reversals.

Role in Intraday Trading

Time is crucial in intraday trading. Charting software addresses this need by providing traders with features such as real-time data, alerts, and multi-timeframe analysis. With the right charting tools, traders can make their entry and exit decisions data-driven and better manage risk.

Difference between Charting Software and Trading Platform

Charting Software: Focuses primarily on analysis and visualization.
Trading Platform: Includes features such s order execution, brokerage, portfolio management, and settlement.

Nowadays, Indian brokers like Pocketful and Upstox also offer advanced charting tools within their trading platforms.

Best Charting Software in India for Intraday Trading

Software	Real-time ticks	Order from the chart	Best for
TradingView	Yes live/real-time (depending on plan)	Yes through supported brokers	For charting, alerts, and community-scripts
Pocketful	Yes Depends on broker’s feed	Yes in-app trading support	For India-focused analytics + execution
GoCharting	Yes tick/order-flow support	Yes Advanced Order Types	Suitable for order-flow and tick-traders
InvestarIndia	Yes NSE/BSE support	Mainly analysis	For India-focused screening and desktop users
AmiBroker	Yes Powerful with real-time analytics	Depends on third-party API/broker setup	For algo developers and in-depth backtesting
Chartink	Near-real-time scans for Premium version	Focus scanner/alerts	For faster scans and custom screeners
Investing.com	Basic Live; delay on some instruments	No data/chart focus	For global charts, news and economic calendar
Zerodha (Kite)	Yes NSE /BSE Live Feed	Yes Trade-from-Chart (ChartIQ/TV)	Broking + fast execution
Upstox Pro	Yes TBT / Tick-by-Tick support	Yes – trading from charts	Broker – for charting and execution
Dhan	Yes TBT / Tick-by-Tick support	Yes – trading from charts	Broker – for charting and execution

1. TradingView

TradingView is the most popular charting platform among traders worldwide. It offers a fast web interface,works on web, desktop and mobile, and a large library of tools shared by traders. Pine Script makes it easy to write custom indicators and strategies. The platform also offers strategy tester (bar replay) and brokerage integration making it useful not only for charting but also for idea testing.

Key Features

High-resolution live charts and multiple market data feeds.
Pine Script: A language for writing custom indicators and strategies.
Strategy Tester & Bar Replay: Backtesting possible by replaying historical moves.
Brokerage/Execution integration (with supported brokers).

Pros

User-friendly UI and cross-device sync the same experience across web, desktop, and mobile.
Large public script/indicator library (community).
Bar replay and strategy tester allow for real-time backtesting.

Cons

Actual NSE depth and some real-time feeds may require a paid subscription.
More advanced automation (continuous live ordering) requires brokerage APIs/third-party tools.

2. Pocketful

Pocketful is an India-focused trading and investment platform that operates on both web and mobile. It offers multi-asset (equity, F&O, commodities, ETFs, gold, etc.) access and brokerage-related features, including a SEBI-compliant broking service. The platform’s web tools, in-app trading and AI insight services are available on the website. This means you can place trades simply by viewing charts on the site/web-trading interface, making it a modern, India-centric option for junior and mid-level traders.

Key features

India-focused data and brokerage integration (in-app trading).
AI assistant: portfolio insights and natural language support.
Quick order placement and basic analytics via the mobile app.

Pros

Easy mobile and web UX for new and mid-level traders in India.
In-app execution + AI-assisted idea generation and order placement experience simultaneously.
The offer/pricing model is often brokerage-connected, making it cost-effective (client-model).

Cons

Being a new platform, large-scale trust reviews and independent third-party benchmarks are limited.

3. GoCharting

GoCharting is an India-based advanced charting and trading platform designed specifically for order flow and market depth analysis. It’s been gaining popularity since 2019 because it offers pro-level features like tick-by-tick data, orderbook visualization, and footprint charts. Its web-based interface means you don’t need to install any software, just log in from your browser and use it.

Key features

Advanced charts ranging from candlesticks to footprint and orderflow.
Live DOM and orderbook visualization.
Multi-timeframe charts and paper trading/replay options.
Direct trading integration with select brokers.

Pros

The first web-based orderflow platform in India.
No installation required, runs directly from the browser.
In-depth and orderflow tools are very useful for advanced traders.

Cons

The interface may seem complicated to new traders.
Free version limited; full features require a paid plan.
Broker integration currently limited to selected partners.

4. InvestarIndia

InvestarIndia is an India-focused charting and analysis software designed specifically for equity and F&O traders. Available on both desktop and mobile, it offers features like real-time NSE/BSE data, a built-in scanner, and backtesting. Its interface is easy to use for beginners and mid-level users.

Key Features

Indicator support for chart types like candlestick, bar, and line.
Live price and volume data for NSE/BSE.
Both mobile app and desktop versions are available.

Pros

India-centric local data and market tools are well integrated.
Simple and easy-to-use UI for beginners.
Screener and backtesting available in one place.

Cons

Lack of advanced custom scripting (like Pine/AFL).
Limited features without a paid subscription.
Not as flexible for professional algo traders.

5. AmiBroker

AmiBroker is considered one of the fastest and most powerful desktop-based charting and backtesting software in the world. It is used by most professionals and algo traders in India because it offers complete functionality for creating custom indicators, strategies, and automation using AFL (AmiBroker Formula Language). Its biggest strengths are speed and the ability to backtest in-depth.

Key Features

High-performance chart engine and customizable layouts.
AFL scripting language allows for writing custom indicators and strategies.
Ultra-fast backtesting and optimization (tick-by-tick data support).
Direct trading execution via Broker/API integration (at some brokers).

Pros

Industry-leading backtesting and optimization speed.
Excellent for algo trading and strategy development.
Full control and customization due to desktop software.

Cons

The learning curve is steep and not easy for beginners.
Real-time market data requires the purchase of a separate data feed.
Works only on desktops; no web/mobile versions are available.

6. Chartink

Chartink is one of the most popular stock screeners and charting tools in India. It is used by most traders to find intraday and swing setups. It features ready-made and custom screeners that allow you to instantly filter stocks based on price action, volume, indicators, and candlestick patterns.

Key Features

Powerful stock screener with hundreds of predefined filters.
Ability to create custom screener rules (such as RSI > 70 and Volume Breakout).
Basic charting options candles, indicators, and multiple timeframes.
Near-real-time data and auto-refresh scans in the Premium plan.
Watchlist and alerts system.

Pros

India-focused powerful screener, especially for intraday and swing traders.
Easy-to-use interface and no installation required.
Easy to test your own strategies by creating custom queries.

Cons

Advanced charting (such as bar replay, deep backtesting) is not available.
The free version has a data refresh delay; real-time is available only to premium users.
Direct trade execution is not an option.

7. Investing.com

Investing.com is a global market data and charting platform that covers stocks, indices, commodities, forex, and crypto, not just in India but globally. Available on both web and mobile, it offers free-of-cost charts, news, and an economic calendar for traders. While it lacks execution brokerage integration, it’s quite useful for analysis and global coverage.

Key Features

Free interactive charts (candlestick, bar, line, etc.).
Multiple technical indicators and drawing tools.
Global coverage: Equities, Indices, Forex, Commodities, and Crypto.
Economic calendar, market news, and fundamental data.
Portfolio tracking and watchlist creation.

Pros

Global and India coverage available in one place.
Free charts and indicators are a good choice for beginners and casual traders.
Economic calendar and news integration further strengthen analysis.

Cons

Real-time NSE/BSE data may be delayed.
Direct order execution is not available.
Features like advanced backtesting or custom scripting are not available.

8. Zerodha (Kite)

Zerodha is an Indian discount broker, and its trading platform, Kite, is one of the most widely used charting tools in the country. Kite is available on both web and mobile and features integration with ChartIQ and TradingView. This gives you access to advanced charting, real-time data, and the ability to place orders directly from charts, all in one place.

Key Features

ChartIQ and TradingView integration both available.
Option to save charts (with cloud sync).
Indicators and multiple drawing tools.
Direct trade-from-chart feature (bracket and cover orders).
Watchlists and cross-platform sync (web + mobile).

Pros

Free charting for Zerodha clients with no extra charges.
Execution and analysis are easy from one place.
The interface is clean and responsive, suitable for both beginners and pros.

Cons

Custom scripting (such as Pine or AFL) is not directly available on Kite.
Advanced backtesting is not available; external tools may be required.
Limited to Zerodha clients, external users cannot use it.

9. Upstox Pro

Upstox is a leading discount broker in India, and its trading platform, Upstox Pro, is available on both web and mobile. It integrates with TradingView and ChartIQ, providing users with a smooth charting experience and real-time data access. Its fast execution, low brokerage, and user-friendly interface make it popular among intraday traders.

Key Features

TradingView and ChartIQ integration high-quality charting.
Indicators and multiple chart types (candlestick, bar, Heikin Ashi, etc.).
Direct trade-from-chart feature market, limit, cover, and bracket orders.
Tick-by-tick (TBT) data support for accuracy.
Multiple watchlists and cross-device sync (mobile + web).

Pros

Powerful charting tools available free with a broker account.
Fast order execution and a seamless mobile experience.
Easy platform for both beginners and active intraday traders.

Cons

Custom scripting and deep backtesting are not supported.
Some advanced chart layouts are only available with paid plans or in limited form.

10. Dhan

Dhan is a new but rapidly growing discount broker, particularly known for its modern trading platform and advanced charting tools. Dhan has offered direct integration with TradingView and ChartIQ since its inception, and its most distinctive feature is its seamless “Trade-From-Chart” experience. It’s accessible across web, mobile, and desktop platforms, and execution is lightning fast.

Key Features

TradingView & ChartIQ integration high-quality, real-time charts.
Indicators and multiple chart types.
Direct trade-from-chart (Bracket, Cover, and GTT orders).
Webhooks and advanced alerts algo setup and automation-friendly.

Pros

Clean UI and ultra-fast execution, easy for both beginners and pros.
Free TradingView integration with direct orders.
Dedicated, advanced tools in the Options segment.

Cons

The platform is new, so there’s a limited track record for long-term stability and support.
Some advanced analytics (such as deep backtesting) currently rely on external tools.

Read Also: Best Trading Apps in India

Why Intraday Traders Need the Best Charting Software in India

The biggest challenge in intraday trading is making quick and accurate decisions. Market movements change so rapidly that without good charting tools, you can’t accurately capture entry and exit. This is why every trader needs reliable charting software in India.

Real-time data: Even a few seconds’ delay in intraday trading can turn profits into losses. Good charting software instantly updates price and volume, improving timing.
Understanding trends and patterns: Market breakouts or support-resistance levels are only detectable when charts are clear and indicators are reliable. This is the edge quality software provides.
Placing orders directly from the chart: Platforms like Pocketful allow you to place orders directly from the chart. This ensures fast execution and prevents missed opportunities.
Alerts and notifications: It’s not always possible to be glued to your screen. Custom alerts and mobile notifications help you keep track of every movement.
Risk Control: Features like backtesting and stop-loss make your trades safer and allow you to learn from mistakes.

Key Features to Look for in the Best Trading Software in India

Real-Time Data and Accuracy : Seconds matter intraday. A good charting tool should display price and volume immediately, delays can lead to missed opportunities. Therefore, live, accurate data is essential.
Technical Indicators and Drawing Tools : Simply looking at lines on a chart isn’t enough. Indicators like Moving Averages, RSI, MACD, and drawing tools like trendlines and Fibonacci should be present to clearly see trends and reversals.
Multi-Timeframe Analysis : It’s important to view the same stock in both 1-minute and 15-minute timeframes; the shorter timeframe indicates entry, the longer timeframe indicates direction. Good software should display both to ensure balanced decisions.
Customizable Templates and Layouts : Every trader has different habits, some maintain three charts simultaneously, others vary indicators. Maintaining a custom watchlist and saved layouts saves work.
Brokerage Integration and Fast Order Execution : Having the option to place orders by viewing the chart reduces latency platforms like Zerodha Kite and Fyers offer this advantage. The faster the execution, the better.
Mobile and Web Accessibility : It’s not always possible to stay on screen. Therefore, you need a smooth experience on both mobile and browser, so you can track the market from anywhere.
Alerts and Notifications : You can’t stay on screen all the time. It’s important to receive price-level alerts so you don’t miss any moves.
Pricing and Affordability : Everyone’s budget is different. Start with a basic free tool, and upgrade to a Pro or paid plan when you see the benefits look at ROI, not just features.

Conclusion

Charts act as your eyes in intraday trading. Good charting software provides clear data, accurate indicators, and fast updates. Every trader’s needs are different, so the best tool is the one that suits your style and comfort. The right software makes decisions easier and trading more disciplined.

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Frequently Asked Questions (FAQs)

What is charting software in trading?
It displays price and volume on charts to help understand trends.
Which is the best charting software in India for intraday trading?
One that provides real-time data and useful indicators.
Is free charting software enough for beginners?
Yes, free tools are fine for beginners.
Can we place orders directly from charting software?
Yes, on some platforms, orders can be placed directly from charts.
Do all charting tools support backtesting?
No, only advanced tools support backtesting.

November 6, 2025

Benefits of Intraday Trading

Not all investors are patient enough to hold on to stocks for years. For those who prefer quick decisions and instant results, intraday trading offers an exciting alternative. You can think of it as a day trip in the market: you get in, ride the highs and lows, and then get out before the day is over. If you do it right, it can be fun, rewarding, and full of opportunities. But it is not enough to just be fast; you will also need to be focused, disciplined, and have a plan.

In this blog, we’ll focus on the key benefits of intraday trading and why it appeals to many active traders.

What is Intraday Trading

Intraday trading refers to the practice of buying and selling financial instruments such as stocks, derivatives or ETFs within the same trading day, ensuring that all open positions are squared off before the market closes. The idea is simple: you initiate the trade in the morning (or any time during market hours) and close it before the market closes.

You identify a stock likely to rise, buy it, and sell it the same day to profit from short-term price movements. The profit (or loss) is only from that day’s movement. Intraday trading is all about taking advantage of short-term price changes.

Important Benefits of Intraday Trading

Some of the benefits of intraday trading are given below:

1. Fast Profits

Profits (or losses) are booked within hours or even minutes in intraday trading, meaning there is no need to wait months or years. Gains can be locked in the same day if you execute the right move.

2. No Overnight Stress

You stay away from the impact of unexpected overnight news, world events, or market gaps that could harm your trading positions while you sleep because everything will be settled before the market closes.

3. Additional Buying Power

For intraday trades, brokers frequently offer margins, allowing you to take on larger positions than your actual cash. However, it can increase both profits and losses.

4. Simple Entry and Exit

Buying and selling is easy for intraday traders because they usually only trade highly liquid stocks.

5. Capitalising on Changes in the Market

Throughout the day, markets fluctuate a lot, sometimes due to sentiment, company earnings, or any other news. You can profit quickly by riding those swings with intraday trading.

Read Also: What is Intraday Margin Trading?

Who should consider Intraday Trading?

Intraday trading is not for everyone because it requires fast decision making and is a little risky. It works best for people who:

Have time during market hours – You need to keep an eye on prices movements all day, not just once in a while.

People who stay disciplined – The best intraday traders stick to their plan, use stop-losses, and do not allow their feelings to affect their trading decisions.

Have Technical Expertise- If you enjoy studying charts, trends, and patterns, intraday trading offers plenty of opportunities to apply your technical analysis skills.

Risks Involved of Intraday Trading

1. Prices that fluctuate a lot

Stocks can go up or down in value in just a few minutes. This movement that makes intraday trading tempting can also make you lose money quickly.

2. Leverage means greater risk.

It sounds great to trade with borrowed money when things are going well, but if the market goes against you, your losses get bigger too.

3. Stress and Pressure

Intraday is unpredictable, and making decisions all the time can be stressful. Traders often make mistakes because of feelings like greed, fear, or panic.

4. Consistent Attention Needed

You cannot leave your screen. You could lose money if you miss a price change, even for a short time.

5. No Guaranteed Outcomes

Even if you do research, look at charts, and make plans, the market can still surprise you. News or other unexpected events can turn a winning trade into a losing one.

6. Hidden Costs

More trades mean more taxes and fees for the broker. These small fees can slowly eat your profits if you are not careful.

Conclusion

Intraday trading is the fast lane of the stock market, with lots of action, quick profits, and just as many risks. It is rewarding, but you have to make quick decisions and stay relaxed when prices change. If you like a challenge and can stick to your trading strategy, then intraday trading might be for you. Ultimately, it comes down to understanding your preferences, leveraging your strengths, and making well-planned trading decisions. It is advised to consult a financial advisor before trading.

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Frequently Asked Questions (FAQs)

Can beginners do intraday trading?
Yes, but it can be risky. It is advised to consult a financial advisor and start with a small amount.
How much money do I need to start?
There is no fixed amount for intraday trading. You can begin with any amount, but it is important to trade only with money you can afford to lose.
What time is best for intraday trading?
The first and last hours of the market are usually the most active.
What tools do intraday traders use?
Intraday traders use various tools such as real-time charts, technical indicators, stock screeners, market news feeds, and trading platforms to analyze price movements and make quick decisions.
How much profit can I expect from intraday trading?
There is no fixed profit in intraday trading. Returns depend on market conditions, your strategy, and discipline. While gains can be quick, losses can be equally fast.

November 6, 2025

What are Exchange Traded Derivatives?

The world of trading is filled with terms like Futures and Options, yet many market participants are unsure about what they truly mean. These instruments belong to a broader category called derivatives, which are financial contracts whose value is linked to an underlying asset such as stocks, commodities, currencies, or market indices. Instead of directly owning the asset, derivatives allow participants to manage risks, speculate on price movements, and gain exposure with less capital.

In this blog, we will explore derivatives, Exchange Traded Derivatives, their features, types, advantages, disadvantages, and frequently asked questions.

What are Derivatives & Why Trade on an Exchange?

A derivative is a financial contract whose value is derived from the performance of an underlying asset, index, rate, or commodity. This “underlying asset” can be anything from a share of a company (like TCS), a commodity (like gold), a currency (like the US Dollar), or even a stock market index (like the Nifty 50).

Issues in Private Deals

In finance, when two parties create a derivative contract privately without using an exchange, it is called an Over-the-Counter (OTC) derivative. These contracts can be customized to suit the needs of the parties involved, but they also come with risks as mentioned below:

Counterparty Risk: It’s the risk that the other party in the deal might not fulfill their part of the agreement.
Undisclosed Details: The price and terms are just between both the parties, nobody else knows the details, which can lead to someone getting a raw deal.

Example: Consider two friends. Ramesh, a wheat farmer, is worried that prices may fall by the time his crop is ready in three months. Suresh, who runs a biscuit factory, fears wheat prices may rise and increase his costs. To reduce uncertainty, they agree that Ramesh will sell 100 quintals of wheat to Suresh in three months at a fixed price of ₹2,000 per quintal.

This arrangement protects both of them from price swings, but since it is a private contract, it carries the same risks of an OTC deal. Ramesh worries Suresh may not pay, while Suresh worries Ramesh may not deliver.

Why Exchange?

To fix the loop holes and issues, we have exchange traded derivatives (ETDs). Instead of people dealing directly with each other, they trade these contracts on a regulated stock exchange, like the National Stock Exchange (NSE) or the Bombay Stock Exchange (BSE) in India. Think of these exchanges as a trustworthy platform that stands in the middle of both the parties and makes sure everyone follows the rules. The presence of an exchange makes everything safer, transparent, making derivatives available to millions of people, including regular investors like you and me.

Feature	Exchange-Traded Derivatives (ETD)	Over-the-Counter (OTC) Derivatives
Trading Venue	Traded on a recognized exchange (e.g., NSE, BSE)	Traded privately between two parties
Contract Terms	Standardized (fixed size, expiry date)	Customized to fit specific needs
Counterparty Risk	Very low, as the exchange guarantees the contract rules are followed	High, as one party could default
Transparency	High, prices and volumes are public	Low, terms are private
Regulation	Regulated by bodies like SEBI	Less regulated
Suitable For	Retail investors and institutions	Mainly large institutions and corporations

Features of Exchange Traded Derivatives

Standardization: All the derivatives of contracts on an exchange are standardized. This means there are fixed rules, like the quantity also known as “lot size”, the quality of the asset, and the end date.
Reduced Risk: This is a major advantage. When you trade on an exchange, the clearinghouse acts as a middleman, ensuring that even if one party defaults or goes bankrupt, the trade is still completed as agreed.
High Liquidity: As traders trade on the same standardized contracts on big platforms like the NSE, there are always tons of buyers and sellers around. This is known as high liquidity, it is great because it means investors can easily buy or sell a contract almost instantly at a fair price.
Transparency: On an exchange, trades happen transparently, all the buy and sell orders are visible to traders in real time. The price you see is the real price, based on supply and demand of assets.
Regulations: In India, Securities and Exchange Board of India (SEBI) sets the rules of the trading market for exchanges and brokers to make sure the market is fair and safe for everyone. SEBI’s main job is to protect your interests as an investor, keeping a close eye on all the trading activity.

Read Also: Index Derivatives in India

Types of Exchange Traded Derivatives

In India, you can trade derivatives on most of the things, but mainly in Futures and Options. These can be based on:

Stock Derivatives: These are futures and options on the shares of individual companies like Reliance, Infosys, or HDFC Bank.
Index Derivatives: These are contracts based on a stock market index, like the Nifty 50 or Bank Nifty. Instead of putting all your money on one company, you’re taking a view on the whole market or a specific sector.
Commodity Derivatives: These are contracts on physical goods, you can trade them on exchanges like the Multi Commodity Exchange (MCX), like gold, silver, crude oil, and even some agricultural products.
Currency Derivatives: These contracts are based on currency pairs, like the US Dollar vs. the Indian Rupee (USD/INR). Currency derivatives are a lifeline for importers and exporters who need to protect themselves from fluctuating exchange rates.
Interest Rate Derivatives: These are a bit more complex and are based on bonds and interest rates. They are mostly used by banks and financial institutions to manage risks related to the changing interest rates.

Advantages and Disadvantages of Exchange Traded Derivatives

Advantages

Risk Management: Derivatives are highly used for managing risk. Investors can use them to protect their stock portfolios from sudden market shifts.
High Leverage: Leverage means you can control a large position of stocks with a small amount of money also called margin.
Transaction Costs: Compared to normal buying and selling of stocks in the regular cash market, the costs of trading a futures contract (like brokerage and taxes) can be lower.

Disadvantages

Leverage Risks: Just as leverage can magnify your profits, it can also amplify your losses quickly. A small price movement in other direction can wipe out your entire investment, and you could even end up owing your broker money.
Complex: Derivatives are not for beginners as it is complex, concepts like expiry dates, option pricing models, and complex strategies can create difficulty in beginning. Trading without proper knowledge can lead you to losses.
Time Decay: Options contracts have a limited shelf life as there is a pre defined expiry date. This is known as time decay, if your prediction doesn’t come true in time, your option can expire becoming worthless, and you lose all the money.

Conclusion

Exchange traded derivatives are a powerful and vital part of the modern financial world. They offer ways for businesses to manage risk and for traders to act on their market views. The safe and open environment of the stock exchange has made them available to almost everyone.

The same leverage that can lead to amplifying investors profits can also cause great losses. These are not tools for beginners, before entering into trading your first derivative contract, the best investment you can make is in gaining knowledge and deeper insight.

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2	What is AI Trading?
3	What is an Underlying Asset?
4	Different Types of Trading in the Stock Market
5	What is Intraday Trading?
6	Types of Futures and Futures Traders

Frequently Asked Questions (FAQs)

Difference between buying a Reliance share and a Reliance future?
When you buy a share of Reliance, you pay the full price of the stock upfront and become a part-owner of the company. When you buy a Reliance future, you’re just signing a contract to buy or sell the share at a future date for a set price. You only pay a small margin upfront and don’t actually own the share.
What is meant by Lot Size?
A lot size is the fixed number of units in one derivative contract. For example, if the lot size of future contact is 500, you have to trade in multiples of 500. Investors can’t just buy a contract for 1 or 10 shares.
What is an “Expiry Date” in Derivatives?
This is the end date till the derivative contract is valid. Based on expiry date, the contract is settled, either by delivering the asset or by commonly settling the profit or loss in cash.
Are ETDs safe for new investors?
While the exchange protects you from the counterparty defaulting, derivatives are extremely risky for beginners because they are complex and highly leveraged. It is highly recommended that new investors should gain knowledge and understand all the risks before putting your money.
Do Investors need a special account for trading via trade derivatives?
Yes, you use your Demat and Trading account, but you have to get the “Futures & Options” (F&O) segment activated by your stock broker. This requires proof of income, as brokers need to ensure you can handle the high financial risks involved.

October 31, 2025

What is Margin Shortfall?

The use of MTF (Margin Trading Facility) in the stock market allows traders to make large deals with less capital. But the most important thing is to understand margin shortfall. This happens when the margin available in your account falls below the minimum limit. In such a situation, margin shortfall penalty may be imposed and your position may be affected. In this blog we will know what is margin shortfall, its reasons, shortfall rec meaning and easy ways to avoid it.

What is Margin Shortfall?

Margin Shortfall occurs when the available margin in your account falls below the minimum required margin set by the brokerage. This can happen due to a variety of reasons such as a fall in stock price, a rise in haircuts, or both. Let’s understand this with some examples.

Margin Shortfall = Required Margin – Available Margin

Suppose you took a delivery trade at a pocketful and the brokerage gave you margin benefit. Now if the market suddenly falls and the value of your holdings decreases, the available margin in your account will go below the required limit.

For example

Situation	Value
Required margin	₹1,50,000
Available Margin	₹1,12,500
Margin Shortfall	₹37,500

In this case, the brokerage will send you a margin call, requesting you to add funds by a specified time. If you do not add the funds on time, the brokerage can square-off your position or charge a penalty.

Common Scenarios of Margin Shortfall

The formula to calculate the margin shortfall is given below:

Margin Shortfall = Required Margin – Available Margin

For example: A trader buys 100 shares of ABC at ₹1500 per share. Total investment is equal to ₹1,50,000. We are assuming a haircut of 25%. So, you need to deposit ₹37,500 to start a position and the rest (₹1,12,500) is funded by the broker. Now we will look at different scenarios.

Case 1: When the stock price falls to ₹1200 (20% drop)

New Position Value = ₹1200 * 100 = ₹1,20,000
Required Margin = 25% of 1,20,000 = ₹30,000
Available Margin = Original Margin – MTM Loss = ₹37,500 – ₹30,000 = ₹7,500
Margin Shortfall = Required Margin – Available Margin = ₹30,000 – ₹7,500 = ₹22,500

Case 2: Haircut increases from 25% to 35% and no change in stock price

New Position Value = ₹1,500 * 100 = ₹1,50,000
Required Margin = 35% of 1,50,000 = ₹52,500
Available Margin = Original Margin – MTM Loss = ₹37,500 – ₹0 = ₹37,500
Margin Shortfall = Required Margin – Available Margin = ₹52,500 – ₹37,500 = ₹15,000

Case 3: Price declines from ₹1,500 to ₹1,200 + Haircut increases from 25% to 35%

Situation:

New Position Value = ₹1,200 * 100 = ₹1,20,000
Required Margin = 35% of 1,20,000 = ₹42,000
Available Margin = Original Margin – MTM Loss = ₹37,500 – ₹30,000 = ₹7,500
Margin Shortfall = Required Margin – Available Margin = ₹42,000 – ₹7,500 = ₹34,500

Use our Margin Trading Facility Calculator

Types of Margin Shortfall

Margin shortfall in trading occurs when your trading account has less balance than the required amount. This can happen at different times and circumstances. Let us understand its three main types

1. Initial Margin Shortfall

When you take a new position and your account does not have the initial margin (i.e. the amount required to start the trade), it is called initial margin shortfall.

Example: If a futures contract requires ₹1,00,000 margin and you have only ₹90,000, it is an initial margin shortfall.

2. Maintenance Margin Shortfall

After taking the position, if the market price moves against you and the balance goes below the maintenance margin, it is called maintenance margin shortfall.

Example : You opened a position with a margin of ₹1,00,000, but due to price fall your balance became ₹70,000 while maintenance margin is ₹75,000, then it will be a shortfall.

3. Difference between the two and brokers’ behavior

In initial margin shortfall usually the order is not executed or there is a demand to add funds immediately. In maintenance margin, shortfall brokers give you time to add funds, and if the funds do not come on time then the position can be squared off.

Read Also: What is Stock Margin?

Regulatory Framework Around Margin Shortfall

SEBI rules : SEBI has made clear guidelines for MTFs. According to the rule, the investor is required to maintain a minimum margin to buy shares, which can be in cash or permitted securities. If it goes below the prescribed limit, it is called margin shortfall.
Role of stock exchange : NSE and BSE take margin reports from brokers daily and take action in case of shortfall. The broker may also be penalized for not updating the margin on time.
Daily reporting and settlement : At the end of every trading day, the broker has to send the client’s margin status to the exchange. Settlement of shares in MTF takes place in T+2 and the margin should be complete during this time.
Margin call and notification : When the margin decreases, the broker sends a notification to the investor so that additional margin can be deposited in time and square-off can be avoided.
“Shortfall REC” and recovery : This means shortfall recovery. In case of non-payment of margin on time, the broker can recover the dues by selling the holding or by other means so that discipline is maintained in the system.

Risks of Ignoring Margin Shortfall

Forced Square-Off : If you don’t cover your shortfall in time, your brokerage (like Pocketful) can force your position to close as per SEBI regulations. This is called forced liquidation or square-off. This can force you to close your position at a loss in weak market conditions.
Escalating Penalties : In MTF, the broker imposes a penalty on margin shortfall, and if this shortfall is high or happens repeatedly, then the penalty rate can also increase. In the beginning, this rate is relatively low, but it becomes quite high if the shortfall persists continuously.
Possible Suspension from MTF : In case of frequent or large shortfalls, the broking house may temporarily suspend your MTF facility. This means that you will not be able to make margin-funded trades next time until the shortfall is made up. Your liquidity and trading flexibility may be disrupted.
Broker Relationship Impact : Frequent shortfalls may make the brokerage feel uneasy about you; you may not be able to avail special MTF facilities in the future. While this may not directly impact your credit score (like CIBIL), it does impact your breaking relationship and convenience.

Check Out – Stocks Available for MTF

How to Avoid Margin Shortfall in MTF

It is very important to avoid margin shortfalls while trading in Margin Trading Facility (MTF) as it not only leads to penalties but also the brokerage can forcefully square off your position if required. With proper planning, caution and timely monitoring, this risk can be easily minimized.

Smart risk management tips:

Keep extra margin buffer : Don’t make the mistake of trading on just the minimum margin. Always keep some extra margin so that you don’t shortfall in case of a sudden fall in the market.
Check positions daily : Monitor your MTF portfolio, margin utilization and collateral value daily.
Avoid over-leveraging : Take as much leverage as you can handle. High leverage multiplies the impact of market volatility.
Adopt diversification : Don’t invest all your funds in a single stock or sector. Investing in different sectors reduces risk.
Leverage technology : Keep an eye on real-time margin updates and price movements through Pocketful mobile apps. Keeping alerts on allows immediate action when needed.
Always keep liquidity ready : Maintain some cash or liquid securities in your trading account so that you can top up quickly in case of a margin call.

Conclusion

Margin shortfall occurs when the funds in your account are not sufficient to maintain your open positions. An easy way to avoid this is to check your margin balance daily and deposit funds immediately when needed. It is also better to keep a little extra margin buffer so that your positions remain safe even in case of sudden changes in the market and you do not have to face problems like penalty or forced closing.

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3	Top Tips for Successful Margin Trading in India
4	Smart Beta Funds: Characteristics, Factors, Benefits, and Limitations
5	Different Types of Trading in the Stock Market
6	What is Margin Funding?

Frequently Asked Questions (FAQs)

What happens if I have a margin shortfall?
In such a case, the broker will ask you to add funds or securities, otherwise the positions can be squared off.
How can I avoid a margin shortfall?
Always keep an extra margin buffer, track positions daily and avoid over-leverage.
Is there any penalty for margin shortfall?
Yes, as per SEBI rules, a penalty may be levied which is percentage-based.
Can I use idle securities to avoid a shortfall?
Yes, you can pledge and use idle securities in margin to avoid shortfall.

October 31, 2025

Category: Trading

What is the MTF Pledge?

How Does MTF Work?

What is the Margin Pledge

How does Margin Pledge Work?

MTF Pledge vs. Margin Pledge

Conclusion

Frequently Asked Questions (FAQs)

Can shares be sold even when they are pledged?

What happens if the MTF pledge is not done in time?

Do Investors have to pay interest on a Margin Pledge?

Can MTF be used in Futures & Options (F&O) trading?

Why do brokers apply a “haircut”?

What is Physical Settlement?

Positions Marked for Physical Settlement?

For Futures Contracts

For Options Contracts

Obligations

How is it calculated?

Settlement Timeline and Deadlines

The Margin Squeeze

Conclusion

Frequently Asked Questions (FAQs)

How can investors avoid physical settlement?

What happens if investors have to sell shares that they don’t own?

What happens if I have to buy shares but don’t have enough money?

What are the charges for physical settlement different?

Does this apply to Nifty and Bank Nifty contracts?

Commodity ETFs – An Overview

Types of Commodity ETFs

1. Gold ETFs

2. Silver ETFs

3. Futures-Based Commodity ETFs

4. Multi-Commodity or Basket ETFs

Best Commodity ETFs in India

1. Nippon India ETF Gold BeES

2. SBI Gold ETF

3. HDFC Gold ETF

4. ICICI Prudential Silver ETF

5. Kotak Silver ETF

How to Choose the Right Commodity ETF

Taxation of Commodity ETF

1. Short-Term Capital Gains (STCG)

2. Long-Term Capital Gains (LTCG)

3. Securities Transaction Tax (STT)

Conclusion

Frequently Asked Questions (FAQs)

Are commodity ETFs safe to invest in?

Do commodity ETFs pay dividends?

When is the best time to invest in commodity ETFs?

How can I track performance?

What is the minimum amount to invest in a commodity ETF?

What Does Bullish Mean in Options?

Types of Bullish Options Trading Strategies

1. Buying a Call Option

Advantages

Disadvantages

2. Bull Call Spread

Advantages

Disadvantages

3. Bull Put Spread

Advantages

Disadvantages

4. Covered Call

Advantages

Disadvantages

Which Bullish Strategy is Right for Investors?

Conclusion

Frequently Asked Questions (FAQs)

Is Bull Call Spread and a Bull Put Spread different from each other?

Shall stocks be bought during the bullish market?

How much money is required to start options trading?

What happens if the bullish feeling is wrong and the market falls?

Can positions be closed before expiry?

What is Trading API

Best Brokers Offering Free APIs

1. POCKETFUL

2. ANGEL ONE

3. ALICE BLUE

4. FYERS