Hi, Zerodha says that: “However, collateral margins cannot be used until negative balances are cleared.” (Source: https://support.zerodha.com/category/console/portfolio/pledging/articles/what-is-pledging). However, I was able to place orders and trade options with a negative cash balance. Interestingly, it didn’t allow me to trade futures on collateral with a negative balance.
Does anyone know why options were allowed in the first place? A glitch in the system?
Recently, option buying has been allowed using collateral by them. Under this system, even if your account shows a negative balance, you can still place orders. However, if the negative balance continues for four consecutive days, then from the fifth day onward, order placement will be blocked until you clear the negative balance.
But this above rule is only applicable for option not futures positions.