Instant unpledge bug

[Anuj_Sharma1]

Hi, I think this is done? Got a notification today about the same. Also, please confirm, if we will get 80% of margin from selling pledged cash equivalent holdings immediately.

[ShubhS9]

@Anuj_Sharma1

Hi, I think this is done? Got a notification today about the same. Also, please confirm, if we will get 80% of margin from selling pledged cash equivalent holdings immediately.

Hi @Anuj_Sharma1, yes, you can now instantly sell cash equivalent securities without unpledging:

Bad experience: Selling non-pledged quantities of a security, which also has pledged quantities

Yes, this has been rolled out to all users from today (was available for a smaller set of users last week) Now will be able to unpledge cash equivalent securities by directly selling them without needing to manually unpledge them first. But similar to stock collateral behaviour, first the quantities will reduce from pledged holding followed by the free holding due to the OMS vendor limitations. Yes, 80% margin will be available instantly after selling the pledged holdings.

[Jason_Castelino]

Finally.

[Anuj_Sharma1]

Thanks team! Good addition to Zerodha’s feature arsenal.

[Chirag1]

@Jason_Castelino did u test it?

Finally, thanks Z for taking it live

[Chirag1]

@ShubhS9 Brokerage calc doesn’t seem to show revised STT/Transaction costs. Kindly check.
01-10-2024 revision

[Jason_Castelino]

@Chirag1

@Jason_Castelino did u test it?

I tried it with limit order by placing order at much higher value than cmp. The order was pending. So yeah. It’s working.

Huge relief for me. I was asking for this for more than a year. So my cash levels that I used to maintain to meet mark to market losses now come down from 20percent to 2 percent.
Thank you team Zerodha. Thank you @nithin for bearing my constant follow up.

[Chetan_Nahata]

@Jason_Castelino

So my cash levels that I used to maintain to meet mark to market losses now come down from 20percent to 2 percent.

Can you explain the model behind this? You still need cash to meet m2m so how does this reduction makes sense?
Ps. I don’t have a full understanding behind the instant sell mechanism of cash eq securities either.

[Jason_Castelino]

I can now buy liquidcase, pledge them and then trade.

So assume I was maintaining cash of 1cr in cash only to meet M2M.
Now I buy liquidcase of 90L, pledge and get 94percent of that back as collateral margin. So I get 84.6L margin.
So my funds are blocked to the extent of 90L-84.6L. That’s, 5.4lakkhs.
For this investment of 5.4L I will get 6 percent of 90L as return from liquidcase. 5.4L.
So it’s 100 percent return on my blocked funds. With trading I generate around 30 percent per annum. So 70 percent extra.

In absolute terms 3.78L extra return.

[Chetan_Nahata]

Okay that’s on the part of returns but now since your funds are blocked ~90L how will the gap be filled?
The original purpose of this 90L to meet m2m
is it something like … you’d sell liquidcase only in case you need that money to meet m2m?

[Jason_Castelino]

@Chetan_Nahata

you’d sell liquidcase only in case you need that money to meet m2m?

Yeah. And from past I have seen that I get into such situation for 3 to 5 days in a year.

[smakkar]

So can Liquidcase etc be sold same day without Unpledging now?

[ShubhS9]

@smakkar

So can Liquidcase etc be sold same day without Unpledging now?

Yep, you can sell LiquidBees and other cash equivalent securities without unpledging.

[Anuj_Sharma1]

One query here - suppose I sell my pledged liquidbees holdings in the morning, but buy them back before market closes, do I have to repledge them or will the entire transaction be nullified in terms of pledging?

[ShubhS9]

@Anuj_Sharma1

suppose I sell my pledged liquidbees holdings in the morning, but buy them back before market closes, do I have to repledge them or will the entire transaction be nullified in terms of pledging?

You don’t have to repledge. Also, the collateral main will be added back to your account balance when you buy back.