Margin from pledged securities for buying options

[Pai]

@jatingarg

Hi @ShubhS9 , can you please guide with relevant logic. It would helpful to get this on Zerodha, even if there no poosibility, it is still helpful to know why Zerodha is unable to provide this option while others can.

Hi Jatin,

We had answered this on a different post as well, linking it here.

No sense or No logic to restrict Option buying with pledged share margin

When you buy Options, you are actually paying cash and this cash is credited to the writer of the option. For eg: When you buy Reliance options worth Rs.15,000, it results in a cash outflow of 15,000 which is credited to the writer of the option. However when you trade Futures, only margins are blocked. So if you sell one lot of Nifty, the Exchange levies margin on your account and similar margins are levied on the buyer’s account also. There is no ‘cash outflow’ to the trader. When you pled…

Pledged amounts can only be used for instruments which have margins associated with it (like futures and short options) and not instruments which require you to bring in the entire cash amount (like buying stocks and going long options).