Mutual Fund collateral when lower circuit hit

Zerodha
1

I have pledged some mutual funds as collateral. The reason I purchased it for collateral is because NAV changes once a day. So if the lower circuit is hit during the day, say at 10:30 am. Unlike ETF, MF wont go down 10% then and there, right?

Technically this is right. But I want to know if Zerodha’s RMS system will reduce my collateral even from pledged MF if circuit is hit ?

2

Hi @Mahadevan-Iyer, the collateral margin you get is based on the previous day’s closing price of the security. In the above scenario, the margin will not be reduced immediately, it’ll be reduced from the next day. You can check out this article to learn more about pledging: What is pledging, and how does it work?