Margin through Pledging Shares and Liquid Bees

Zerodha
1

Hello,

Suppose i have open F&O positions and the margin available in my account is through pledged shares and Liquid Bees.
I believe that Liquid Bees are as good as cash and works as good as Cash for margin obligations.

However if i have ‘0’ cash in my account and everything is in the form of Liquid Bees and Shares which are pledged. If i incur a loss on my open F&O positions in such scenario -

Questions:

  1. Will my shares/liquid bees automatically be squared off so that my loss is paid to the broker?
  2. Which one will be squared off first? - Stocks or Liquid Bees?
  3. Is there any penalty/charges if there is no enough cash in account due to which broker had to square off my pledged assets (liquid bees/shares)?

Thanks
Sukesh

2

As long as the collateral margin covers for the SPAN+Exposure requirements, the F&O position will be kept open.
All the MTM losses will be posted to your ledger, and your account will result in a negative balance(interest will be charged at 0.05% a day). If you fail to make good of the debit balance, our RMS team will square-off your pledged holdings to the extent of the debit balance.

3

Hello Mohammed, Thanks for the update.

Will there be a interest charged even if i have margin in form of collateral? (since i dont have cash but only collateral?)

Also can u please tell - In what order will the pledged collateral be squared off?
-> Is it First pledged, first sold?
-> Last pledged, first sold?
-> Random?
-> Liquid bees first and stocks next?

Thanks