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Zerodha is India’s most popular discount broker that gives leverage for only intraday trading. However, how much leverage Zerodha offers for intraday is still unclear to many traders.

If you are one of them, please read till the very end as we answer this question in the article. 

Leverage on trading is the multiple of exposure to account equity. In simpler words, when you trade using a margin and open a trading position with an increased buying power, you get profit or loss returns according to the leverage ratio. 

So for example, if your margin is 20%, your leverage ratio will be 5:1 which means you will book 5 times the profit or loss on this trading. 

Now that we know what does leverage on trading means, we will look at how much leverage Zerodha gives for Intraday trading. 

There are two different product types on which a customer can avail leverages in Zerodha. One is MIS (Margin Intraday Square Off) and the other is CO (Cover Order). 

Both in MIS and CO, Zerodha gives 5:1 leverage (20% margin) based on the volatility of the stock on Intraday equity trading while since September 1, 2021, it has reduced the leverage in F&O, currency, and commodity trading to 1:1. 

It means if a trader uses the margin to open a trade position in Equity, they will get 5 times the profit or have to pay 5 times the loss. In F&O and intraday derivative trading, the leverage is set at 1×.

To reap the leverage benefit you have to maintain a minimum balance in the trading account or you can pledge shares in Zerodha.

No doubt Leverage trading is a risky concept and as a beginner, it is advisable you understand its basics first before starting to trade. 

If you have any more stock-market-related questions in your mind, feel free to drop your details and we will arrange a callback or an answer.