We’re glad to announce that we’ve finally launched the instant sale of pledged stocks feature on Kite, which has been one of our clients’ most requested features for several years. This was delayed due to system limitations, but we are now live.
The previous process for selling pledged stocks was to first unpledge them. An unpledge request must be submitted on Console before 3:30 PM. After the request is processed, the stocks would show up to trade under Kite holdings as free holdings on the next trading day. This process can be inconvenient for clients who want to sell their pledged shares instantly.
This is also required for cash equivalent ETFs to meet M2M losses. Right now I am maintaining surplus funds in SB account. If it’s allowed for liquid ETF, I do not have to keep moving funds from SB to trading. The liquid funds can be used for small premium on OTMs on expiry days.
I have done the math and the opportunity cost of not having liquid ETFs available for instant unpledge will come easily to 4percent. So even if I go with a trading capital of 1cr keeping around 20lakhs in cash, 4 percent on that comes to 80k per annum.
I have already started moving my funds to my new trading account. By this week 20 percent will be moved. The main reason was instant unpledge wasn’t available.
But now that they came up with it, I thought of staying here but then liquid ETF are still not allowed. So it doesn’t serve the purpose for me.
Yes. That’s why I am moving. I waited for wayyyyy toooooo loooooonng. In the example I have given an example of 1cr. My capital is bigger and it makes a huge difference to me in terms of absolute value. I can at least go to US for a 7 days holiday with that additional amount.
Currently, pledged liquid ETFs are not allowed to sell instantly considering the benefit which it has when it is part of collateral margin.
In addition, the limitation we have since we show available cash margin with 50:50 margin reporting criteria on Kite funds page. Having said that, we are working on allowing liquid ETFs to be instantly sold, will keep the thread updated.
