If the value of pledged securities increase, in that case will the margin received by pledging will increase as well??
yes. collateral is always a percentage of traded value
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Noted. Thankyou😃
The collateral amount received will is calculated from the previous closing price of the securities after the haircut and included in the total margin available on Kite. So if the price of pledged shares increases, the margin too will increase and vise-versa if the price drops. Explained here: What is pledging, and how does it work?
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If the stock that is pledged is volatile, the lender can insist on higher number of shares to be pledged without increasing the limit. This is to ensure that they have adequate security coverage in case the stock tanks and to avoid margin calls or even worst invoking the pledge. This is generally for Corporate lending.
Recently Adani group pledged additional shares to SBI so that margin call do not happen.
I guess he is talking about pledging for margin which can be used for trading derivatives.
Yes, And i have pledged debt funds
Yes. Your collateral margin will increase as your NAV increases.
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Margin received is proportional to value of pledged holdings ofc .
And if volatility increases margin required can also increase.