Collateral margin/Pledging stocks for placing BO


I came to know that I can place BO using collateral margin. But I am still confused with what charges will be charged, hence can someone explain how much would I have to pay for the below scenario:

Suppose I have 1 lakh worth stocks that I have pledged. After haircut (suppose 10%), I get 90K as collateral margin. Now if I don’t have any other Cash fund except this 90K, I place intraday bracket order worth 90K. What will I be charged if I make a profit of 10K and what will I be charged if I make a loss of 10K?

Whether interest will be charged on collateral margin used at the end of the day or even on intraday orders?

Chirag Keswani

It’s totally free if you trade intraday both in equity and fno…but for carry over of FNO you need to keep 50% margin in cash else an applicable rate of interest will be charged per day for the margin above 50%.

Thanks for your response. So if I make a loss of say 10K that day, how is that going to be settled? At the end of the month, or when I unpledge my pledged stocks?

You can now pledge securities (Stocks & ETFs) to get collateral margin which can be used for trading futures and options on equity and currency.

As per Exchanges, on an end of day open position basis, only 50% of margin required to trade F&O can be brought in by the way of collateral (margin received form pledging securities). The remaining 50% has to brought in as cash. If the client doesn’t bring in cash, a brokerages working capital will be getting utilized.

The interest percentage will be at 0.05% per day for whatever the debit amount in the account.

Click here to read more about Online pledging of stocks for trading F&O

If you make a loss of 10k and if u don’t have cash in your trading account…then your trading account will be in -10k plus brokerage …and an applicable rate of interest will be charged for that -ve balance till you deposit amount in your trading account else it will be settled when you sell your holdings after unpledging.