Margin funding for intraday

Why isn’t Zerodha doing this?


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I read in a different thread that Zerodha’s margin funding facility will go live around Aug 2021

But I had a question of my own, In another thread, it was mentioned that margin funding can only be done for equity delivery trades -

In the Twitter thread referenced above, the author had clarified that margin funding isn’t allowed for F&O (even there, somebody shared an instance of margin funding being used for overnight F&O positions but with reduced leverages) but mentioned nothing about restrictions for intraday. Does this mean there is no restriction in using margin funding for purposes other than equity delivery trades?

There is no way any broker can fund overnight F&O positions, atleast legally. That must be someone just sharing wrong information.

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Thanks for the clarification.

I had another question related to this topic. Given that 20% margin is blocked till the next trading day (due to the new peak margin rules) when selling holdings from demat, is it possible for Zerodha to lend that 20% money for a single day via the margin funding facility (as and when it goes live)? Maybe this facility could be exclusive for users doing a rebalancing on Smallcase so as to do away with the requirement of bringing in extra capital. After that, the user can repay the loan in full the next day as the delivery margin gets released and also pay charges for borrowing via margin funding facility for the previous day (I assume that the charges would be around Rs 28 per day per Lakh if the interest rate is similar to the LAS offering). Would margin funding be possible in this scenario?

I think it should be possible if user opted for margin funding but currently with other brokers there may be minimum amount allowed so I don’t think for a user who want to get funded hundreds/thousands it may not be allowed, said that we haven’t finalized any minimum /charges etc at Zerodha yet as currently we are working on the backend changes.

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