I would like to know what is the best to way to pledge collateral and trade in the options?

F&O
1

I know Zerodha accepts only 50% of margin money as collateral and 50% should be cash. Can anyone suggest what is the best way to do it ?

Example - I have 5 lakhs of cash in my Zerodha. How to do I split it into cash collateral
and non cash collateral on the total amount. I was planning to take Govt Bonds, Equities, Mutual Funds. Is there any other better way to do it ?

Above on the same example - I’m selling options which requires margin amount of 4.5 lakhs. To cover this margin, I have pledged 2.25L of liquid bees (including haircut) and pledged another 2.25L from my mutual funds holdings. Will this work ?
Or
At any cost, I can pledge only 50% of my margin i.e 2.25L in all forms of instrument(liquid bees,MF,Equities,Bonds) and other 50% should be in cash ?

Suggestions please !

2

Dont over complicate things.
You need 50% of Margin in cash OR Cash collateral ( This can be liquid bees, debt funds, Bonds etc)

The other 50% can be anything that is non-cash ( pledged Equity or equity oriented stocks, ETF, MF etc)

Keep some idle cash for transaction costs, MTM etc

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3

Thanks Chirag1 :slight_smile: makes sense. I thought liquid bees are non-cash. Thanks again !

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