liquid bees and margins confusion

I have read the article and all the threads related to liquidbees, still the confusion remains and hence posting the question.

I want to short certain options, Lets say i need Rs.70,000 as margin.

I have lets say 39 liquid bees in my account (Rs.1000 each) and since there is a haircut of 10%, will this be used as is in calculation of margins or am i required to pledge this so that this can be considered as margin. Liquidbees themselves are considered cash equivalent or the margin produced by pledging liquid bees is considered?

And for the remaining 35000 margin, if i pledge 12 Goldbees (worth 2668 each after a 12.5% haircut) will that be enough?

With the above setup, there is no other cash component required for selling an option?

Question2: What if the gold price drops from 2668 to 2000? will there be a drop in the margin available in my account? or the margin is calculated at pledge time and it wont change?

Hey @hittudiv

Qn1 - You will have to pledge liquid bees for it be considered as margin to open a position.

The collateral margin received after pledging liquid bees are considered as cash equivalent. Liquid bees themselves aren’t considered as cash equivalent.

When you open a position, free cash in your trading account will be considered for half of the required margins and the remaining half will be taken from the collateral margins. In case you don’t have free cash the entire margins will be taken from the collateral and interest charges of 0.05% per day will be charged on the shortfall amount (i.e the shortfall of free cash)

Ex - to short option worth 70000, 35000 will be taken from your free cash & remaining 35000 will be taken from collateral margins. In case you have no free cash & you have collateral margins (after pledging & considering haircut) worth 70000, you will be allowed to open the position, but you will be charged interest of 0.05% per day on the shortfall of 35000

However, Collateral margin received against pledge of liquid bees, will be considered as cash equivalent. So if you have collateral margin of Rs 70000 from pledging liquid bees, you can take a position upto 70000 and not be charged interest

Qn2 - Collateral margin varies based on the price of the pledged security. It changes daily based on the price of the security which is pledged.