Likely the missed opportunity-cost due to not trading,
is lower than booking a loss by selling GSECs.
(unless market conditions are favorable for short-term speculation,
i.e. if a sudden market downturn occurs, despite strong fundamentals,
folks often sell GSEC/SDLs at a discount,
and speculate on equity that might bounce-back sooner/faster in the near future.)
On the topic of how to avoid/manage this “forced unpledge” risk, here’s a topic-thread discussing a similar situation from last year. A suggested practice that came-up in that thread was to monitor the liquidity of one’s pledged securities in the secondary market to be able to anticipate any of them being moved out of the pledge-list.
Also, it appears to be a recurring challenge (maybe the back-end has exact stats of impacted users/losses due to such a forced unpledge). To ensure that impacted folks are able to read the notice and respond to it in a timely manner, this scenario definitely sounds like a candidate for a more prominent notification (if one doesn’t exist already).
Does something like this exist already / is planned / makes sense to support?
As soon as the information from the clearing-corporation is known and the announcement is sent out to the users, a prominent notification (at the top of the Kite page/app) for affected users (redirecting them to email/link with exact details). The user must NOT be able to dismiss/hide such a notification until the pledged securities are unpledged (either manually by the user, or automatically once the deadline passes).
@Ragavendran_M / @ShubhS9, thoughts?