Is it possible for Zerodha to execute an order in an NFO of an ETF even when there are insufficient funds in the Demat account? i.e., make a negative entry in the ledger and demand funds from the client at a later date?
Hi, this happened because you would have placed an order across different maturities and we didn’t want to chose for you. In the event that your account has gone into debit, you will have to bring in the funds failing which the units could be sold in order to cover for the debit balance.
So what you are saying is if two different orders are placed for apples and oranges (in sequence); you will buy both apples and oranges on behalf of the client without a check of the client’s account for sufficient funds and later demand the deficit money from the client!
It is surprising that Zerodha doesn’t have the ability to do such basic checks in the first place.
No, what I’m saying is at such times, we don’t want to end up choosing what instrument to invest for the client. By placing the order, an intent to invest in the bond is expressed by the investor. While Zerodha does not intend to fund client purchases, simply choosing based on the sequence of the order placed, would cause displeasure to the client and I’m saying this with experience. In the event that the funds aren’t transferred, Zerodha reserves the right to liquidate such allotted bonds in order to recover the debit balance outstanding in the account.