If I sell some options on expiry day with 100% collateral margin in NRML mode and let it expire, will interest still be charged for 50% of the margin amount?
Hi Nitin,
For a bull call spread if the total margin requirement is say 25000, can use collateral margin to fund 50% of this and SGBs to fund 50% cash component?
Apart from the above said collateral, do i also need to have cash in trading account equivalent to the premium of long call option?
Yes, you can, but for buying options you’ll need cash in your account as collateral margin cannot be used for this.
The long option i mentioned is a part of bull call spread. Even then do i need to have extra cash in trading account apart from collateral (50% stock pledge, 50% SGBs pledge)
Yes, for buying the option, you’ll need cash in your account. For shorting the option, you can use the collateral margin.
@ShubhS9 Can i use all the margin from the colletaral for intraday?eg colletaral 1lakh, cash 10k. Margin 110k. Can i use all the margin intraday without penalty
Yes.
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I think it depends on the broker you use to pledge stocks and trade f&O. As you only take 50% of your margin for f&O and the other from your own sourcing, the interest will be calculated on a day by day basis depending on the balance you have and your brokerage charges applied.
Any idea if ICICi Direct also offers margin against securities like zerodha is no interest if the stipulated 50 (cash or equivalents) and 50 other securities ratio is maintained …they do offer something called SAM but interest of 0.05% per day is applicable on that !!!
Continuing the discussion from I pledge stocks and use margin on it to trade F&O. How will interest charge be calculated?:
Hi Nithin, can you clarify on no. of days the interest will be levied(0.05% per day).In total number of days, will trading holidays will also be counted or only days on which market is open. (Suppose I have some debit balance)
Can i create a pledge request on saturday or sunday ?
You can place a request to pledge. This will be processed on Monday and once you have authorised it at CDSL, you will receive the margin the next day. Explained here.
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Usually how long does the SGB takes to come up in the pledge list ?
I had applied for series 6 which got allotted in 1st week of September. When I checked my sms my pledge request was accepted on 14/10. So it’s almost a month( before it is possible to pledge).
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Hi Nithin,
I currently have around 4+ lakhs of free cash and 33+ lakhs of collateral cash in my account. If I take overnight position in bank nifty for 20+ lakhs. I fall short of 6 lakhs of free cash which results in debit balance and interest of 0.05% will be charged everyday on this. I have a couple of questions here:
- If my MTM is in loss, will RMS team square off my position? or can I continue holding my position by paying interest every day.
- If RMS team squares off my position, to what extent of debit balance will they square off because I also have 4+ lakhs free cash in my account.
Thanks,
Pramod
As long as exchange prescribed margins are maintained that can be in the form of cash + collateral or only collateral value your position will not be squared off from our end.
The only thing is if your cash balance is negative you will not be able to initiate fresh trade until the principal cash balance becomes positive even if your few lakhs collateral value is left idle.
As long as exchange prescribed margins are maintained there will be no action from the RMS team, in case of any shortfall arises after computing your cash + collateral that much-extended position will be reduced from our end.
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do you follow FIFO method or LIFO method or squareoff the profit position or squareoff the loss position OR squareoff in proportionate ratio method ?
As you are aware futures settlement happens daily basis based on the closing prices, the position will be reduced based on the margin requirements.
Can i use pledged collateral margin to short stocks in Intraday?