Can buy futures+ option with collateral

F&O
1

Can I trade Buy futures and Buy option with collateral Margin?. If i have extras Cash balance can also be take interest charged?

2

The collateral margin can be used for intraday equity, buying and selling futures and selling options. However, for buying options you will need to maintain cash in your account. The collateral margin cannot be used for this.

There is no interest charged for using collateral margin. However, for overnight F&O positions, you have to maintain minimum 50% margins in cash and remaining 50% can come from collateral margin. If you use collateral margin in excess of 50% then interest is applicable on the additional collateral used. The interest is charged at 0.035% per day. You can learn more here:

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4

can “cash equivalent” collaterals be allowed to buy options ?

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5

Nope. Cash equivalent collateral too cannot be used.

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6
  1. Even for Intraday Option Buying “cash equivalent” collaterals cannot be used?
  2. If Part of a Strategy involving option selling and buying, this “cash equivalent” collaterals be used to enter the whole strategy?
7

Even for intraday option buying you will need cash in your account.

In this case too, you will need cash in your account to buy options. However, if you take short option position first, you will receive premium which can be used for buying options.

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8

@Manthan_Rajgor @profit there are stock brokers who allow option buying with pledged margin. Also there are stock brokers who allow you to buy otm options. No benefit in blocking excess margin to sell first when you can buy first and sell next to get hedge margin benefits.

9

Who are those Brokers Pls…

10

I shall DM you…

11

Means you are saying, for credit (Credit Spread) strategy we can used Collateral margin?
Please reply shubham sir.

12

Collateral margin can be used for selling options, for buying options you will need cash. The premium you recieve after selling options is added to your cash balance which can be used for buying options.

13

Bonds when pledged, is the margin showed in Collateral (liquid funds) or Collateral (equity) in Funds page in Kite?

14

If it’s in the list of cash component, it’s shown under liquid. Otherwise equity.

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16

I had pledged some G-Sec yesterday and the margin is showing in equity today. So got a bit confused.

17

I have gilt funds, SGB, Money market, liquidbees pledged and if shows in liquid.
Never bought Gsec. So not very sure.

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18

As a part of strategy, I am Buying options using cash from short options first

  1. will interest rate be charged for this buying options?

  2. As an example a strategy has net premium received after short option+ buy option at the start, at the end of the day overall strategy PNL is +ve or slightly -ve, but the short option position has eaten away the net premium and available cash has become negative. But sufficient Cash equivalent collateral is available, Available margin is positive.
    Will interest/penalty applicable if i carryforward this strategy positions?

19

Can someone clarify these points pls…

20

if below is the case how the collateral margin can be used -

Selling nifty future + buying nifty call option(hedging purpose) with basket order…