I have pledged stocks, taken collateral margin and I use this margin for trading futures and options. Am I charged any interest for using this? If yes, why? My old broker wasn’t charging me for this.
Suggest you to read this post for detailed explanation on how pledging of stocks for trading F&O works with us.
50% of margin required for F&O position has to come in cash. Whatever money you are short by would attract an interest cost as you would be using the brokers funds.
Some traditional brokers who charge % brokerage waive these charges off as they earn quite a bit on brokerage charges. It makes up for the interest outgo + a lot more for the broker. Check this query on how interest rates are calculated.
As a discount broker, we can’t take this overhead. Hence we charge clients interest when they use our funds.
Hi Nithin, this interest will be charged only if we have overnight position? what about intraday? if 50:50 ratio is not maintained and i trade in intraday, will i still be charged?
The interest is charged only for overnight positions. No interest for Intraday.
I have used about Rs 2.64 lakh margin in my account. My cash balance is around Rs 2.50 lakh and equity collateral is Rs 2.03 lakh.
However, in my fund statement… the full applicable margin has been charged in cash and thus a negative balance.
Since 50% should be in cash and 50% can be in equity collateral… why my account has a negative balance?
Should fund statement not charge me Rs 1,32,478.13 (2,64,956.25/2) and withdraw-able balance be Rs 1,18,036.05 (Rs 2,50,514.18-1,32,478.13)?
Now will I be charged interest since my ledger balance is negative?
If the interest is being charged on this negative balance, then is it not charging interest on pledged shares, which NSE allows and broker funds have not been involved in this case?
I signed up today, hoping to transfer my holdings to zerodha and use it as my primary account - the above question seems fair. If there is a valid reason and a solution, kindly post here. It will help others.
I have not been charged any interest for Feb month. Apparently, the balance in the console statement is not proper for charging interest, but the cash balance in kite is relevant.
I have the same issue.The statement in console vs funds tab show us different values and confuse us.I would like to knw what is the solution you got for the problem.i.e. collateral margin is not calculated for statment in console…
Pls help me.