I have an intraday trading capital of Rs.50,000. I only trade in NSE Cash Stocks, mainly in highly liquid Nifty 50 stocks. Risk per trade does not exceed Rs.1000 and I do not take more than 3 trades per day.
I have the following queries -
I am planning to use 15,000 capital from my original 50,000 to buy Liquid Bees and then pledge it to get margin using that 15,000 for intraday trading. This leaves 35,000 capital to meet the 50% cash requirement and to cover MTM loss. Generally, is this a good strategy to efficiently utilise intraday funds?
As far as I am aware, for intraday trading, 50% of the margin used must be CASH and the remaining 50% can be collateral using pledges securities. Please confirm if it is correct? (I am not asking for overnight F&O positions. I am just asking for NSE CASH INTRADAY. I read this article on Zerodha Support Portal but still it did not clarify this query of mine)
This article on Zerodha Support Portal mentions that - “The cost of pledging at Zerodha is Rs 30 + GST per pledge request.”. If I am pledging multiple securities, will it charge Rs.30 per stock/ETF, or combined Rs.30 for all stocks and ETF altogether.
I think it is not worth doing this considering returns of 3% from liquid bees so it is around 450 per year on your investment of 15k and also it involves pledging costs and other.
Also pledging is for fno only and not for cash as of now with us.
Per underlying and each time one pledges.
As you are saying you are starting with small capital and want to do intraday trading using leverage which is very risky. I would like to give my 2 cents from my experience, you can ignore if it won’t make sense to you.
Never be penny wise and pound foolish in markets, I mean your goal is to make money by trading so don’t bother about efficient cash management etc, don’t put your resources (brain and time) on unnecessary things , concentrate on having a trading plan with risk management and try learning continuously.
Thank you so much @siva for an insightful and quick response. I have some follow up questions -
What if I have a running long term portfolio of 1.5L in the same Zerodha Account, should I pledge those stocks to get additional intraday margin ?
If I pledge stocks (as mentioned in point 1 above), and if I plan to sell those stocks sometime in future, how much time does it take to unpledged stocks on trading days, as well as on non-trading days? I want to know the estimated timeline of the whole process.
does this mean, I can not use this collateral for NSE Cash Market for Intraday Trading?
And if this is the case, is it the same for all brokers, or just some brokers including Zerodha?