Pledge Margin for overnight position

F&O
1

i have colletral margin of 3L and 10000 cash margin. can i carry overnight position of 3L rupees ? if yes, then what will be the palenty i have to pay? thank you @siva

2

Yes, you can take F&O positions with margins of 3L.

50% of the margins have to come by way of cash - so of the 3L, 1.5L needs to be in cash, since you have only 10k, interest will be charged on 1.4L

3

can you tell the exact amount or daily interest percentage?

4

Can check this support article, 2nd point.

5

thank you so much

6

Hi pls confirm if 1.4l is not maintained does ledger shows in negative balance ? Or 10k as balance,?
If in negative what will happens to the position if it goes against?

7

@VenuMadhav
Step1 : Free Cash - 1 Lac

Step2 : Sell F&O requiring 1Lac margin, resulting in “0” free cash

Step3 : Pledge holdings and get 1Lac collateral after haircut %

Step 4 : Sell new F&O contract requiring 80k margin. When position was opened, the entire 80% was used from collateral

Step5 : Margin report at end of day
Total margin required : 1Lac + 80k = 1.8L
Available cash : 1L
Collateral : 1 L

Now will the report consider
"out of 1.8 L margin requirement, 90k used from Cash and 90k from collateral leaving 20K as balance on the next day Available margin ? "
Is the understanding right, margin requirement is calculated at the end of trading day ?
So, in this case no interest shall be charged?

Thanks in advance

8

You’re right, in the given example, where total margin required is 180k, we will look for 90k cash and 90k collateral. Since you’re fulfilling this with 100k cash and 100k collateral, we will not be charging any interest in this situation.

I’m assuming all of these transactions (including pledge and margin against pledge) have happened on the same day.

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9

yes, all transactions are assumed to be executed on the same day.
thank you VenuMadhav for the clarification.

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