Hi All, I have this general question about adding funds to Zerodha account.
When we get settled out once in the qtr and all cash balance is transferred back to our bank, what is the best way to add it back immediately into Zerodha?! The reason why this is a problem for me is that I keep most of my balance as cash and I trade everyday.
My bank(SBI) allows me to transfer only 10L per day hence I’m not able to use my entire capital on the next morning.
If I try to park in overnight instruments, the whole buy/sell settlement cycle takes time making me lose trading days
If I try to park in Liquidbees etc. and pledge for collateral margin, 1) I dont like the haircut and 2) the returns are dogshit.
Are there anyone who’s had a workaround for this? What is the best solution to this? Have anyone worked with SBI to increase this limit and do they budge?
Maybe @Kaps might know about this. They had asked a similar query a few weeks back and would likely have looked into the solutions suggested in that thread.
You can park your funds in icici prudential overnight funds where you will get the return more than savings bank account and it’s more safe also. In funds withdrawable section of zerodha you can see the icici prudential overnight funds section.
Here is a possible workaround; I am not sure how practical it is for you:
HDFC bank’s third-party transfer limit (which we can set using their netbanking interface) maxes out at Rs.25L (https://v1.hdfcbank.com/htdocs/common/NetBanking/product/tpt.html). Zerodha has an eCMS account with HDFC, and transfers to this account take just a few minutes from another HDFC account. If using an HDFC bank account is an option for you, then this will work around your problem, as long as you are OK with transferring at most Rs.25L per day.
Another option is to short options overnight so that margin utilized is at least 50-60% of total capital. You can do it with 80-90% too but minimum 50-60%.
Go to console and find the likely week of settlement given by zerodha. Short options during that week. Zerodha will settle your funds that day by process of deemed settlement. It means that if a client has an overnight positions, brokers are allowed to retail 2.2 times that amount. So your entire capital will be retained and settlement will be said to be done for this cycle. Repeat the same process next quarter.
About which options to short? You can actually take a proper trade based on market view. Or you can simply short very far OTM calls or Puts. Example - shorting 16000 ce. Your only goal is to get maximum margin blocked.
Thanks, this seems like a workable solution. Some great lateral thinking there!
The only anxiety is the possible case of gap opens next morning that might cost me dearly. Then I’ll have to put hedges and other risk management strategies like a full-on positional trader(which I hate). But I guess I can work something out.
@siva is there any way to know the exact date on which Zerodha will run qtrly settlement on my account? (atleast a few days in advance) I receive a note saying ‘my account will be settled in the next 10 days’ but do I get to know the exact date?
That Rs.10L limit you mentioned turns up on SBI’s web page (https://www.onlinesbi.com/personal/neft_rtgs_faq.html), so I think it is unlikely (especially given that it is SBI, but I would suspect, also for other banks) that they would be able to relax this for you. This looks like something they enforce system-wide. But there is no harm trying, I guess.
For the purpose of Corporate Internet Banking, any non-individual customer, whether it is a single man enterprise, small business enterprise, firm, trust, institution, Government organization or large conglomerate is treated as a Corporate.
If you are already doing your trading as some kind of a firm, then it may be worthwhile weighing the pros and cons of shifting to one of the corporate accounts which have no upper limits on online transactions.