leverage zerodha

Wiki Article

Leverage is one of the most important tools for traders who want to amplify their buying power in the stock market. Zerodha, being India’s largest discount broker, offers leverage in a regulated and transparent way across different segments. Understanding how leverage works on Zerodha can help you trade smarter while managing risk effectively.

What Is Leverage in Zerodha?

Leverage in Zerodha allows you to take larger positions in stocks, futures, commodities, or currencies by using only a portion of the total capital required. In simple terms, leverage means borrowing funds from the broker to increase your trading exposure.

Zerodha follows SEBI’s strict peak-margin rules, which means leverage amounts today are more controlled compared to the past. Still, traders can use leverage through specific product types such as MIS, CO, or Futures trading, which naturally provide built-in leverage.

How Leverage Works in Zerodha

Zerodha provides leverage based on the type of trading product you select. It works differently for equity intraday, futures, and commodities.

1. MIS (Margin Intraday Square-off)

MIS is the primary intraday product used in Zerodha to avail leverage in the equity segment.

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  Provides up to 3x–5x leverage on selected liquid NSE stocks

  
  


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  Allows you to buy or sell stocks with lower capital

  
  


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  Positions must be squared off the same day

  
  


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  Auto square-off happens around 3:20 PM

  
  

Leverage levels vary daily depending on volatility, liquidity, and stock-specific risks.

2. CO (Cover Order)

Cover Orders require a mandatory stop-loss, which reduces risk for the broker. Because of the stop-loss, Zerodha may offer slightly higher leverage on CO compared to MIS.

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  Useful for high-volatility stocks

  
  


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  Requires strict risk control

  
  


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  Might be disabled during volatile market conditions

  
  

3. Leverage in Futures (Equity, Commodity & Currency)

In the futures market, leverage comes naturally because traders pay only the SPAN + Exposure margin, usually 10–20% of the contract value.

However:

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  Zerodha does NOT offer extra intraday leverage on futures

  
  


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  Leverage is fixed by exchange rules and SEBI

  
  

Despite this, the natural leverage in futures is already significant.

4. No Extra Leverage on Options Buying

If you buy options (calls or puts), Zerodha requires full premium upfront.

But when selling options (shorting), margin requirements apply, and no extra intraday leverage is offered due to SEBI peak rules.

How to Check Leverage in Zerodha

Zerodha offers transparent tools to check leverage and margin:

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  Kite Order Window → shows real-time margin

  
  


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  Zerodha Margin Calculator → detailed leverage info

  
  


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  Z-Connect blog → latest updates

  
  


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  Kite Margin Dashboard

  
  

These tools help traders plan their positions effectively.

Important Things to Know About Leverage in Zerodha

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  Leverage is available mainly on equity intraday (MIS/CO)

  
  


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  No additional intraday leverage in Futures & Options

  
  


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  Leverage varies based on volatility and risk

  
  


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  More leverage = more risk, so proper risk management is essential

  
  


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  Zerodha follows all SEBI peak-margin rules strictly

  
  

Conclusion

leverage zerodha helps traders participate in larger trades with lesser capital, especially in equity intraday and futures trading. While leverage can increase profits, it can also magnify losses if not managed properly. By understanding how Zerodha’s leverage system works through MIS, CO, and natural futures leverage, traders can make smarter, well-informed decisions.