Blocking money in bank for cash collateral and pledging shares for non-cash collateral?

Brokers
1

Hi,

Is there any broker who allows blocking the money in bank as cash collateral for trading margin and also taking shares as collateral for non-cash margin?

I know upstox gives blocking of money in their 3-in-1 account for trading. This way the transfer (blocking and unblocking is realtime and we can do it unlimited times for free) is easy and the money that is not used keeps earning interest. However, upstox doesn’t allow pledging of shares.

Zerodha allows pledging but their 3-in-1 account doesn’t allow marking lien and releasing.

Regards,
Arun

2

You can transfer that money to Zerodha, buy some liquidbess and pledge them, liquibess act as cash component and also earn you some interest at same time.

3

Doesn’t work as seamlessly as marking and unmarking lien on savings account. I need money in my bank account within end of day for some purchases I do. Unpledging liquidbees takes one day and selling takes one day to get money in my bank. It isn’t as seemless as upstox.

4

Just want to know, why you want money to be in bank account?
Also you do only intraday trading?

5

I do business apart from day trading. I need funds available real time for settlements. I know Zerodha (@nithin) has 3-in-1 account with IDFC First bank. If this facility of blocking and unblocking is there, I don’t need to buy any liquid funds or liquid bees. Saving account giving 7% interest rate and real-time liquidity is the best option for cash portion of trading.

6

But you do intraday day trading? even liquid bees give interest but not anything close to 7%.

7

Nope, I take overnight positions mostly. Sometimes I do intraday trades also.

8

So, for overnight positions keeping money in bank won’t work right? you need to transfer them to broker.

2 Likes
9

You are trying to use same cash for multiple things which is not possible. For trading purposes you should use surplus cash and also cash which you can afford to lose as success is not always guaranteed.

10

Nope. In upstox, I can block a portion of my balance as trading balance and it is available for both overnight and intraday usage. Whichever balance is not utilised for trading earns interest along with the portion of balance that is not marked as trading balance.

The moment I wish to use it for any other purpose, I can unmark the balance as non-trading balance and it is available for any other purpose like business. There is no transfer of money involved with broker account.

11

I need to reuse. I am not using the same money for 2 purposes. For all the time my money is not used for trading, it should be available for any other purpose of mine.

I understand the risk involved and I diligently allocate money into this account. However I need this money available the moment I feel I don’t want it for trading.

12

Right but when you trade for overnight that money should be moved to broker at EOD right? said that it has it’s own advantages.

13

What is the risk in doing what you do at upstox?