Know all about ‘Available Limit’ before you trade

5 mins read
by Angel One

While trading, knowing where your funds are being used and the amount you have available for trading is of utmost importance. The total of funds that are available to trade on a particular day and the margin against eligible holdings (if the user has pledged the shares) is known as the Available Limit. On Angel One, under the Available Limit section, you can also see the used margin. This used margin means your funds are utilized for your intraday trades, carry forward positions or you have open orders that are not yet executed.

With Angel One, you can see 2 sections under the ‘Funds’ section:

  1. Funds – This section contains all the details about the funds like the margin available to trade and the used margin

  2. Pledge Holdings – Under this section, you can see the additional margin you can get against your eligible holdings as well as all the details of your pledged and unpledged transactions. You should also know that the margin raised against collateral can’t be used to enter into equity delivery transactions.

Take a look at the funds segment on the Angel One app and let’s understand what it consists of:

Total Margin

Total Margin is the total of funds and holdings available in your trading account. To calculate this, we take the following details into consideration:

Fields

Meaning

Effect (+/-)

Previous Day Balance

Closing combined ledger balance of the previous day across all segments

+

Funds Transferred Today

Funds you have added from your bank account today

+

Funds Withdrawn Today

Funds you have withdrawn from your trading account today

–

Realized Gain

The profit that you have earned by selling your investment at a higher price as compared to the purchase price

+

Credit For Sale

Funds that you are allowed to utilize from the sale proceeds you have received

+

Adhoc

All the things that have not been considered in other reporting like

  • The haircut difference between MTF VaR & normal equity on MTF pledge stock

  • VaR margin on previous day sell if early payin is not done

  • MTF pledge benefit over net debits

  • Haircut difference in CUSA holding if exchange haircut is less than 20%

  • MTM profit of cash segment

  • Haircut difference of unsettled stock holdings if exchange haircut is less than 20%

(All these values are not considered for 80% MTM loss, these are booked only for fresh positions)

+

Notional Deposit

A total of penalty(ies) that is yet to be charged and DP charges

–

Holdings

All the holdings you have pledged as collateral

  • When you pledge more holdings as a collateral

  • When you sell your pledged holdings

Miscellaneous Deposit

Any of the charges or incomes not covered above will be included in this

  • When income is in surplus

  • When charges are in surplus

Used Margin

The margin that is locked up due to open trades or any other reason and can’t be used to trade or open new positions is known as the Used Margin. While calculating the used margin for your trading account, we consider the following things:

  1. Trade/Positions – Funds that are utilized for executing your equity and F&O intraday or positional trades

  2. Realized Loss – Loss that you have suffered when you square off your open position

  3. Unrealized Loss – It is the loss on open positions

How to check the available limit on your trading account?

  1. Head to the ‘Funds’ section after logging in

  2. Under the ‘Funds’ tab, you can see 3 tabs, namely,

    1. Total Margin – Total funds available in your account

    2. Used Margin – Funds that are locked and can’t be used for trading

    3. View Transactions – All the transactions such as funds transactions, DP transactions, and more that you performed in a specific period

  3. Under the ‘Pledge Holdings’ tab, you can see the margin available against your holdings

How available margin to trade is calculated?

The margin available to trade mentioned in the Funds section is calculated using the simple formula mentioned below. This available margin can be used to enter into new trades or open new positions.

Available Margin = Funds (Cash Margin) + Holdings (Margin Against Pledge) – Used Margin

How to increase your available limit?

There are 3 ways through which you can increase the available limit in your trading account:

  • By successfully adding more funds to your trading account

  • By squaring off your position (the funds from the used margin will be transferred to the available margin, thereby increasing the limit) or selling the holdings

*Please note that only 80% of the amount from sell transaction can be utilized the same day and the remaining 20% will be available to trade after settlement

  • By pledging the collateral using margin pledge

Conclusion

The amount of money available to trade is known as Available Limits. It includes funds balance, pledged holdings, and margin against pledged securities. Now that you know what it is, Keep an eye on your available limit before placing an order to make sure that your transaction is not rejected. Also, from this section on our app, you can go to the ‘View Transactions’ tab to check all the transactions you have done during a particular period. Check the available limit on our app or web platform here.