Discount broker Trade Smart Online launched its margin funding arm Equimax today for customers looking to leverage and buy equities in the cash market.

According to a press release from the company, under EquiMax, a customer will get “an exposure up to four times the cash balance for delivery. For example, if a customer has Rs 1 lakh in his account, then he can leverage its position and still buy stocks up to Rs 4 lakh.” This facility will be currently available only on the NSE Cash segment. Typically, it’s a temporary loan that a trader takes from his brokerage to fund share purchases which he cannot immediately fund himself.

Debit balance arising out of such funding will attract an interest of 0.05 per cent per day. If there is no ledger debit at the end of the day, no interest will be charged. The facility will be available on desktop, mobile and browser versions of the trading platform.

Margin funding facilities give traders access to temporary and long-term funding for cash market purchases. “After the recent increase in lot size in the futures and options segment,” the statement added, “EquiMax will make it easier for smaller traders/hedgers to trade in the market.”

The margin funding business in India is roughly estimated at $1-billion industry, which is entirely owned by traditional brokerage houses. Vikas Singhania, Executive Director, Trade Smart Online, said, “We would leverage on the Rs 50 crore fund size, with borrowings from banks and NBFCs, and are targeting an Rs 200 crore book size."

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