Nithin, my understanding is also the same. Out of 50K, 25K should come from cash and 25k can from collateral margin. In this example, 25K collateral margin will come out of 40K collateral. But, the cash available is only 10K and hence the shortfall in cash is 15K (which comes from your working capital). So the interest should be calculated on 15K and not on 30K. Is it not correct? Please clarify.
Nitin, Sandy has a valid point, in this case Interest should be on 15k, Can you please clarify ?
Pledge button for liquidbees enabled. T1 pledge - disabled.
All fine now.
Hey @nithin, thanks for the detailed replies. Is there an option to pledge mutual funds (invested via coin platform?). I read that a few other popular brokers are providing this option.
@nithin
I only have Liquid Bees in my account.
I have pledged all of them. 0 cash.
Now if at the end of the day I am at 5000 MTM.
So how is this settled?
- some liquidbees immediately sold? If yes, then by whom?
- I am not able to sell them as I have pledged them right?
- Is there any interest charged if debit amount is carryforward?
Not currently, we plan to have soon - but only on growth funds.
We wouldn’t sell any if the loss is say under 5 to 10% of your liquid fund portfolio. But this again isn’t a rule, it is prerogative of our RMS team based on their perception of risk. Best to always have some extra cash in your account. But losses mount, yes our RMS team will sell it coz client can’t. Yes there is interest charged on the debit as you’d be utilizing our(broker) funds.
If I pledge liquid bees for one month. will i be getting dividend at the end of month?
If I pledge liquid bees for one month. will i be getting dividend at the end of month? If not where the dividend went?
Yes, Liquidbees dividends are usually paid out once every 28 days. For whatever period of time the units of Liquidbees were held in our account after you having pledged them, we reconcile dividends and credit them to your demat account.
Hi,
What I have understood after going through this thread that one can’t buy stock from margin funding? Is my understanding correct? Some brokers allow you to buy stock from margin funding also and dey charge interest in lieu and you have to clear the balance in T+6 days otherwise your accounts get blocked. Is this facility not available in Zerodha?
Hi @gaurav_jain,
Yes, like you said, currently margin funding facility is not available in Zerodha, but we have acquired a licence to do this( an NBFC licence) and are in the process of rolling out a product shortly.
Cheers,
Lindo
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Any update on this? 
it had been more than 1.5 years
so as long as we have 50% cash required by exchange in our trading account that goes along with 50% collateral margin (against shares) there will not be any interest charge correct?
In other words if we dont borrow real cash from broker …there is no interest charge… …
to be more clear…when we borrow money against our shares …there will not be any interest correct?
I am planning to move a large DP holding to Zerodha and then pledge it to do intra-day trading.
Let us say I have a DP holding of 1 cr and zero cash balance in Zerodha. I pledge my DP holding to create a collateral margin of 90 lakhs (assuming 10% haricut).
Now if I use this 90 lakhs for only and only intraday F&O trades, will I be charged any interest as I do not have any cash margin? As per my understanding cash margin shortfall is calculated only at day end and since I do not carry any F&O positions overnight, there should not be any interest charges. Is my understanding correct?
According to the policies today, we only charge interest if at the end of the day, for the positions held by you, you are short on the cash component of the margin. Accordingly, for the example you’ve mentioned, no interest is levied as of today. The policy however can be changed, due notification will be shared if there are any plans to charge interest for intraday usage.
Thanks for the clarification. Will start my trading.
Charging interest on intraday would be difficult as the margin utilized will keep changing every tick due to MTM. Also, how will the time period be defined for interest calculation? It could be in minutes/seconds etc.
I haven’t anywhere said that we’re going to start charging for intraday positions, I only meant to say that the policy is subject to change if necessary. For now, there are no thoughts to levy interest of intraday positions. If,when it’s actually going to charged, the terms will be laid out.
Yes understood. Thanks.
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