When it comes to the margin, the discount brokers are more transparent in their policies. Zerodha and Upstox both are discount brokers and started their service almost on the same time. Both have competitive brokerage plan – free delivery trading and Rs 20 max per trade in Equity Intraday, Derivatives, Currency and Commodity. Both brokers provide free trading tools.
In this article we will discuss about Zerodha vs Upstox Margin Comparison. In-depth comparison of margin policy of Zerodha and Upstox, covered for all the segments and order types CNC, MIS, CO & BO.
What is Margin?
In simple words, margin is the certain amount of contract value that needs to be deposited by the trader to enter the trade and the rest of the amount is taken care by the broker. The broker acts as a lender.
|Equity Delivery Margin||No Margin.||No Margin, with MTF get 2x margin|
|Equity Intraday Margin||Up to 14x margin||Up to 15x margin with Base Plan, Up to 20x with Priority Plan|
|Futures Margin||Up to 2x margin (Of NRML Margin)||Up to 4x margin (Of NRML Margin) with Base Plan, up to 5x for Index and 4x for Stocks with Priority Plan.|
|Options Margin||Up to 2x margin (Of NRML Margin)for options shorting, no leverage for option buying||Up to 4x (Of NRML Margin) for Index/Stock Options Sell, Priority Plan - Up to 5x for Index and 4x for Stock Options. No leverage on Options Buying.|
|Equity CO/BO Margin||Up to 20x margin||Up to 20x margin with Base Plan, Up to 25x with Priority Plan|
|Futures CO Margin||Up to 33x margin (of complete contract)||Up to 4x (Of NRML Margin)for Index/Stock futures, Priority Plan - Up to 7x for Index and 6x for Stocks|
|Options CO Margin||Up to 20x (of complete contract) margin for options contracts sell. Buying is enable for NIFTY only.||Up to 4x (Of NRML Margin) for Index/Stock Options Sell, Priority Plan - Up to 5x for Index and 4x for Stock Options. No leverage on Options Buying.|
|Commodity Margin||Up to 2x MIS Margin of SPAN. Complete SPAN is required to carry forward positions.||Up to 2.5x MIS Margin of SPAN, 3x for Priority Pack. Complete SPAN is required to carry forward positions.|
Let’s compare each by segment:
For buying and selling CNC (Cash and Carry) order or delivery order, both the brokers don’t provide any margin. You must have 100% of fund in your trading account to carry f/w such trades. Upstox started Margin Trading Funding where they provide 50% or 2x Margin. The position will be square off on 30th of every calendar month. You can borrow up to 5 lakhs of margin where ratio must be 50/50. Upstox charges Rs 20 per 50K and its multiple per day as interest on borrowed money. So you get additional margin with Uptsox using margin funding for delivery trades where Zerodha don’t have such facility.
Zerodha offer up to 14x margin in NSE/BSE Cash segment, where Upstox offers up to 15x margin in NSE/BSE Cash in Base Plan. Upstox also offer a priority plan in which they offer up to 20x intraday margin for NSE/BSE Cash or MIS orders. So if you are a trader and looking for higher margin, the Upstox Priority plan is the best fit for you where you need to pay bit higher brokerage (Maximum Rs 30 per executed order) but you will get higher leverage.
For Carry f/w future contracts, Zerodha as well as Upstox, both brokers don’t provide any margin, you must have 100% of the SPAN+ Exposure amount in your trading account to take such position.
For MIS orders Zerodha give 2x leverage, where Upstox offers 4x exposure for both stocks and Index. With an Upstox Priority plan, one can get 5x exposures for Indexes and 4x for stock future contract note.
Both the brokers not giving any leverage for options buying. For options selling contract Zerodha is offering 2x leverage where Upstox is offering 4x leverage for stocks and indexes. With Upstox Priority plan you will get up to 5x leverage for Indexes and 4x leverage of stock options selling contracts.
Zerodha offer up to 15x margin in Equity CO/BO, where Upstox offers up to 20x margin in the Equity CO/BO. Upstox also offer a priority plan in which they offer up to 25x margin for cover order/bracket order. The Cover Order and Bracket Order are intraday order with stop loss, as you are fixing your losses both broker offer higher margin. Compare to Zerodha, Upstox is offering higher margin for Equity CO/BO.
For Future CO/BO, Zerodha give up to 33x of leverage (of complete contract) for both equity as well as an Index. Where Upstox offers up to 4x exposure (Of NRML Margin) for both stocks and Index with base plan. With an Upstox Priority plan, one can get up to 7x exposure for Indexes and 6x for the stock future contract. Compare to Zerodha, Upstoxa is giving much higher exposure/margin for Index and stocks future contracts co/bo.
Both the brokers not giving any leverage for Options Buying except Index NIFTY. For options selling contract with Cover order, Zerodha is offering up to 20x of leverage (of complete contract) where Upstox is offering 4x leverage (of NRML Margin) for stocks and index selling. With Upstox Priority plan you will get up to 5x leverage for Index and 4x leverage for stock option selling contracts. Again, in Options Selling CO, Upstox is giving much higher margin compare to Zerodha.
For commodity trading no margin offered by both brokers for Carry f/w positions. For Intraday positions, Zerodha offers a 2x MIS margin of SPAN where Upstox offers 2.5x margin with base plan and 3x with Priority Plan.
Leverage or Margin is directly associated with your Risk. If the trader does not get his view right and trades without a stop loss, then things might get risky. Stop loss is one of the primary tools that is used while trading in the derivatives segment or while trading margin products, as the chances of facing losses are quite high. That’s why CO and BO are given high margin. Upstox is offering higher margin for Equity Intraday, Future & Options MIS orders and Equity CO/BO orders, where Zerodha is giving high margin for Future and Options CO orders. For commodity trades both brokers are giving almost equal margin. The catch between Zerodha CO/Bo margin for future and Options contract is they are showing a number of Total contact where Upstox is showing a number of NRML margin.
Last updated on 19th May 2019