Negative cash balance after trading loss

Zerodha
1

@siva-reddy @ShubhS9

I have all my funds pledged as collateral for options selling. Only 1 Lac was kept as cash balance.

Now due to crazy markets in last 1 week I have incurred losses of more than 1.4L and tomorrow I will be sitting on negative cash balance of -40K.

Plz let me know what action will Zerodha take if I am unable to bring in cash?
Will it just keep deducting interest charges at 0.05% per day on 40K amount?
Or will it liquidate my pledged holdings?

Plz give clarity in detail.

2

Yes, you will have to add funds to your account, failing which, the securities you’ve pledged can be liquidated. Until you add funds, interest of 0.05% per day will be applicable.

You can check out more details here:

3

Please note that daily MTM losses have to be settled by transferring funds to the trading account.
Failure to do so would lead to your pledged (collateral) stocks being sold to make good the debit.

To know more please go through the below link
(Why were the shares I pledged squared off?)

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4

Few Qs:

  1. I have stocks, liquid funds, debt funds & Hybrid funds. In which order will you unpledge them?

  2. For the shortfall of 40K, will you only unpledge 40K worth of holdings or more?

  3. Will I be charged interest till holdings are unpledged & sold?

5

  1. We will first un-pledge the liquid bees/ liquid Mutual Funds and then equities.

  2. If the account is still in debit even after 24hrs of notifying, we will un-pledge up to the debit.

  3. yes, 0.05% per day or 18% p.a will be charged as interest on the debit balance.

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