Hi.
assume Govt. bonds are purchased in secondary market at discount or at premium price.
When we pledge it in zerodha, margin money is calculated as per issue price or as per my purchased price which may be at discounted or premium price as case to case.
Also, will it be re-calculated daily as per secondary market price as it was purchased form secondary market (Similar to stock pledging ) ?
I have same doubt in SGBs also.
Any insights please…
Pledging is against the holding value not the coupon rate.
If you have purchased at 1.2 lakh for a coupon rate of 1 lakh, with a 10% haircut - your pledged value will be 1.08 L
If your holding value goes up, the collateral value will go up, same downside also.
Thank you… But what if i purchased in others (Like Bonds india, india bonds, goldenpi , fixedincome.com with zerodha DP account no ?
There I might have paid at discount but only qty details (I assume) listed in zerodha right ?
But as Liquidity is almost nill in some/most scripts, closing price how they conclude ?
Explained here, @viswaram: What is the base value to calculate margin amount from pledged SGB? - #3 by Nakul
hope you got your answer.
GOI bonds and SGB do not have a high % change on a daily basis. Both of them are stable (less volatile) so your collateral value more or less will not vary much
The prices will rise and drop depending on the holding value. Just keep updates on the news and do some research to clear your head and get ready to make a decision soon. Best of luck!