How to buy bond from secondary market

Bonds
23

On Kite, the price will depend on demand and supply. On Coin, the amount blocked for G-secs is the estimated weighted average rate of all allotments to competitive bidders + accrued interest + markup value (difference between the lowest and highest bid).

The excess amount that remains after reducing the allotment amount from the blocked amount will be credited back to your trading account. More on this here: On what basis does Zerodha block money for the bids for G-secs?

Yes, you will be able to pledge since the G-Secs will be credited to your demat account upon allotment.

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24

Thanks for the information. Its really helpful.

25

If I pledge bond & used this capital for options Selling ( whithout interested)

Means 10 lac bond pledge ( hair cut may be 92% ā€¦ means 9.2 lac used in options Selling whithout interestā€¦ because of this money is as a liquid money )

If u have reliance ( 10 lac market price) & pledge this then as a hair cut 8.5 lac used but with intrestā€¦

Means different between stock pledge & bond pledge

26

Bonds and other approved liquid instruments are treated like cash, so you can use them to meet your entire margin requirement without paying any interest.

Equity, however, is considered non-cash collateral. Here, the 50:50 rule applies at least half of your margin must come from cash. If you donā€™t maintain that cash portion, interest will be charged on the shortfall.

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27

Can be only buy govt bonds from Zerodha? I tried searching corporate bonds but the result was empty.

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28

Need to search for right symbol. Which specific bond are you looking for?

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29

I searched with ISIN: INE0NES07261

30

yeah ISIN search is broken. Search with BSE or NSE symbol and it will show up.
image

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31

cool, thanks

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32

Any idea what is the difference if I buy it directly from Zerodha instead of goldenpi or wintwealth? If I buy through say goldenpi, i know its maturity, interest payout timelines. How does the interest payout work (which dates) if i directly buy it via zerodha?

33

maturity or interest payment dates for bonds are fixed at the time of issue, and remains same throughout bonds tenure.
So for a particular bond, dates and all relevant details remains same regardless of where you buy it from.

A big difference though maybe liquidity (at least for buying). Most of these bonds are pretty illiquid and you might not get a seller available on exchange at required price.
These platforms like goldenpi / wintwealth used to do some kind of market making (matching buyer / seller or getting a big chunk from issuer and selling it to retailers at fix price)

So availability might be slightly better on some platforms.

One big caveat
Do not blindly trust yield numbers shown by these platforms. Calculate yourself and confirm what they are indicating.
In past I have a seen a case with paytmmoney, where they did a mistake in calculations, and arrived at YTM of 38% per year, and people happily bought it assuming they are going to get 38% interest a year.
In reality what they bought was not even going to cover the buying price they paid.

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34

Thanks. well explained. Any idea about charges? I guess it will be the same for both? (zerodha and goldenpi)

35

No idea on charges.