How does pledging of shares work?

#1

@siva @nithin
If i have shares worth of @ Rs.5,00,000/- in my demat account and I pledge it to get margins for F&O how much margins will I get? Will I get margins for Futures and selling Options as well?
Please explain it with an example.
Thank you.

#2

It depends on the stocks which you are pledging, each stock could have a different haircut. Check this list.

Check this on how to pledge

https://support.zerodha.com/category/q-backoffice/portfolio/articles/how-do-i-pledge-my-shares-to-get-collateral-margin

and this for more on pledging

1 Like
#3

Do not have shares like MRF ,SHREE CEMENT ,3M INDIA in this list !

#4

Thank you sir for your quick reply.
Very useful information.
Thank you very much.

#5

@nithin sir,
In above article it’s written that pledged shares will be debited from the demat account. So I just want to know if debited from demat account where does it go? who provides margins against these pledged stocks? How do they get benefit from these shares?
Just curious.
Thank you.

#6

We pledge it with NSCCL (NSE clearing corporation). They use this security as collateral. They don’t get any benefit as such directly. But this adds F&O trading volumes to NSE, so indirectly they benefit.

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#7

@nithin sir i was long asking about pledged shares and margin positions in equity like Icicidirect 180 days margin scheme. Daily nominal interest on SAM ( sec as margin)

Will this come in zerodha?

#8

In our list of things to do.

#9

@siva
Sir how much more patience we need to have until we can start pledging at least liquid funds?

#10

This should happen soon as we also want to offer this on priority.

#11

@siva If I’m not wrong Zerodha doesn’t provide leverage for delivery/carry over positions. Will this be available in the near term ?

#12

Margin funding is in our list of things to do.

1 Like
#13

What are the chances that zerodha bring Margin funding this end of the year ? @siva @nithin

#14

Another 2 months delay from end of the year.:sweat_smile:

#15

LAS should be out in few weeks and margin funding will take few more months.

#16

@nithin using LAS will I able to sell options and get the below benefit mentioned.

Exchanges stipulate that for overnight F&O positions, 50% of the margin needs to compulsorily come in cash and the remaining 50% can be in terms of collateral margin. If you don’t have enough cash, your account will be in debit balance and there will be an interest charge also called delayed payment charges of 0.05% per day applicable on the debit amount.

What exactly is the difference between LAS and margin trading ?

#17

LAS is loan against share the facility is being offered by almost all private and nationalized banks and also some cooperative banks . the money available can be used for any private use including buying shares .
Margin trading is broker specific who allows you to purchase / do trading by few multiples keeping your shares as security and charging interest too.