For one who wants to
make a profit with little investment amount and low risk, the share trading can
be a viable option. Here one can go for any of the avenues as per his knowledge
and start trading. The best option that one can go for with low investment is
trading in intraday, which has limited risk and ample chances to have more profit
over a period. The most important point is one can accumulate the learned
profit, get more exposure and avail benefits of volume trading, which can add
to more profit again.
The
margin money and exposure:
As everyone knows that
to start any business, one needs to invest some amount. The investment may vary
from business to business and person to person. In this market also one who
wants to trade needs to give an amount to broker and depending on that amount,
the broker offers him a limit within which he can trade in the market. There is
no specific rule or standard for such a limit, and it is purely on the
discretion of the broker. Some broker offers 5 times exposure while some offer
20 times also.
A trader who wants to have traded in a huge volume but does not
have a huge amount to invest needs to find the lowest margin stockbroker who can
also offer good exposure to his margin money and hence he can easily go for the
bulk trading.
Why
does one need to go for bulk trading?
If one goes for
intraday trading, it is necessary for him to go for bulk trading. The bulk
trading can help one to find the profit even if one settles the trades with a
low margin of profit also. If a trader has 200 shares bought and sells with the
profit of 2 Rs per share, he can earn the profit of 400, but if he has bought
1000 shares, he can make the profit of 2000 Rs. The trader may have the same
fund, but there are service providers who offer more exposure to the traders,
and hence they can prove useful to the traders in earning more profit by
trading in large quantities.
Why
is more exposure, not a practice?
There are primarily two
factors that affect the decision of the exposure by the brokers. the first one
is more exposure can lead to more amount, and hence the rest of the amount has
to be given by the concerned broker, which may not prove feasible for him. The
second reason is more exposure can lead to more risk to the client, and in some
cases, he has to bear a huge loss also. In such a situation, the broker may
land into trouble if the client is not able to pay the loss instantly. Hence
many of the brokers allow a restricted exposure to the clients for their margin
money.
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