Before you start with trading, some money is required for the same, so this initial form of deposit is called Margin Money.
WHAT IS THE MARGINE MONEY AND WERE USE OF THE MARGINE MONEY PLS ANSWER ME WITH EXAMPLE
Margin money is some amount of money that is required to be paid by clients to create any position. The remaining amount will be maintained by Broker.
Margin money is used to create derivative positions such as currency, futures & option or commodity. Also used in equity trading against demat account holdings.
Example: To buy Nifty 1 lot(75 qty), the exchange required the total margin of Rs. 68000 as per today. This 68000 is called as margin. The contract value would be (75 qty * 11300 market price) 847500. Here, you are paying only 68000 as margin.