Margin is nothing more than the broker providing you with more purchasing power than you have in your account. The terms “margin” and “exposure” are used interchangeably. If a broker is providing “2x exposure,” that is the same as saying that the broker is providing “50% margin.”
For example, assume that you have Rs. 10,000 in your trading account, and your broker is providing you 50% margin (2x exposure) on Futures. That means that if you wanted to place a trade worth Rs. 10,000, and the exchange is requiring the full Rs. 10,000 from the broker, you would only be debited 50% of the trade value (Rs. 5,000) on the transaction. By the end of the trading day, however, you must exit your position.
Many brokers require a “minimum” or “initial” margin; this is nothing more than the minimum amount that you must maintain in the trading account at all times. For example, a broker might require Rs. 10,000 in initial margin; this means that you must have at least Rs. 10,000 in your trading account at all times.
Different levels of exposure (different margins) can be provided by a broker to different segments of products. E.g: 4x exposure on Equities, 2x exposure on Futures, and no exposure on Options.
