Option Selling and margin

F&O
1

Hello All…
Suppose I wish to carry overnight position in option selling.
I pledge mutual fund for cash collateral. There is no Equity Collateral. Is there any penalties I have to paid?
For Example- Required Margin is 80000 and Cash Collateral from pledging of debt mutual fund available is 95000.
Thanks.

2

Hey @Rohi51

The exchanges require that 50% of the margin for F&O positions must be in cash or cash equivalent collateral, while the remaining 50% can be in the non-cash collateral margin. In case there is no cash, interest at 0.035% per day will be charged on the cash component funded by Zerodha.

You can pledge liquid funds which can be considered as cash equivalent securities.

You can check on this link to learn more about pledging.

3

Thanks for prompt reply. Is it possible to BUY option from cash collateral component?

4

The collateral margin can be used for intraday equity, buying and selling futures, and selling options. However, for buying options you will need to maintain cash in your account.

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5

Thank You Sir.

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6

Hello Sir.
Good Evening.

  1. Is every Govt Sec Bond is Eligible for pledging? I mean every 3 year/5 year duration Gsec can be pledged?

2)Can you also tell me Which instruments is most secure for investing and getting cash collateral purpose? Debt / Liquid Mutual fund or Gsec?

Thanks.

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7

SGBs also may serve as collateral for margin requirements, provided they are included in the approved securities list eligible for pledging.

You can refer to this sheet for the list of approved instruments that can be utilized as margin collateral, along with the haircut percentages.

8

Good Morning Sir,

My query was regarding Govt Secure Bonds Not SGB…
Thanks.

9

@Rohi51

ahh my bad !! The same list contains approved G Secs as well which can be pledged.

10

@KarthikAcharya
If the interest is charged by Zerodha, under what heading does this reflect in account statement

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11

You can check for “Delayed Payment Charges” in the ledger.

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12

My margin suddenly turned negative today morning. SPAN margin blocked on Friday EOD as per funds statement in console, shows about 45 lakhs, while SPAN margin shown in Kite, in the funds page, shows around 63 lakhs. Why this huge discrepancy between the both and how come SPAN margin requirements increased suddenly on a trading holiday?
@nithin @KarthikAcharya

13

Hi @Roy, this was fixed in the afternoon itself. Sorry for the inconvenience caused.

1 Like