Pledge related questions

@ShubhS9
AXIS GROWTH OPPORTUNITIES FUND - REGULAR PLAN GROWTH
While Regular Plan is available for pledge why direct plan is not available for Pledge ?

The Clearing Corporation has currently only approved Regular Plan for pledging. If an when Direct Plan is approved, you will be able to pledge. Explained here.

Hi sir…

i took bull call spread position with collateral margin. Buy leg with cash and sell leg with margin. After few days if i have to shift my buy leg to another strike i would have to square off the existing buy leg and do so. During that short while i would be having a naked short call. I would be having adequate collateral margin for naked short too and would be buying buy leg within minutes. In this case as i am having naked short for a minute or two just with collateral margin and no cash or cash equivalents would i be charged interest for the day? Or is calculated on eod basis?

No. You can use 100% collateral margin on intraday basis. The 50:50 Cash - Collateral requirement is only for overnight.

The naked short for a short while i was referring to was nrml. Even then it does not attract interest ?

With pledged margin, you can’t buy options. Only sell.

Can I use collaterl margin to buy securities in cash market for overnight? Will I be charged interest for this?

Just a quick question. Can I pledge Liquidbees or other stocks and trade intraday in cash markets using that collateral?

Or, I can only trade F&O using that collateral? @ShubhS9 @siva

No. The collateral margin can only be used for intraday equity, trading futures and shorting options. For equity delivery and buying options, you will need cash in your account.

Yes, you can use the collateral margin for trading intraday equity (MIS, CO).

Hi Shubh,

I have seen mixed answers for this: Is 50:50 requirement for Intraday as well or if i get 80K after haircut, that can be used fully without any interest/shortfall?

thanks

For intraday trades you can use full collateral margin, there won’t be interest charged on it. The 50:50 requirement as explained above is for overnight positions.

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Thanks, is there any resource where I can compare the pros and cons of pledging Mutual Funds Vs ETFs. Just considering if NiftyBees is a better deal or Index Fund Via Coin, purely from pledge benefit stand point - Both I intend to just hold and use it for margin. Your point of view is welcome. Thanks for responding :slight_smile:

I have a question to zerodha here. i was on net debit for a couple of days in my account and was travelling etc , so i thought zerodha would unpledge and square off my positions. i didnt bother to fund my acct as i thought they can square off any scrip as market is at high. But last one week, they didnt square off but charging me late payement fee. there is email sent everyday saying they would square off my positions, but they didnt. Also There is no email that we would be charged late payement fee etc but they were charging it. seems they are no different than other brokers.

Lol dude. Most people don’t want their holdings sold. They want to be given time to add cash and settle the debt with broker. If you want your holdings sold then do it yourself and settle the debt. Or wait for a month or so and zerodha will sell it for you and charge your many penalties too.

Can’t believe how some people behave. Carrying negative balance. Getting emails daily. Can sell holdings or add cash at the push of a button. Chooses to do nothing. Then complains about late payment. “liquidation” is a bad word and most clients don’t want their holdings to be liquidated suddenly. This penalty can be called stupidity penalty as well. Next time, don’t be stupid.

ETFs will score over mutual funds if you need to liquidate on daily basis - as a limit order can be placed for a NAV you prefer.

Mutual funds are liquidated at market price - you wont have a control on the final sold NAV

Also refer the expense ratio, tracking error of ETF vs its mutual fund. 9/10 times ETFs are better and also their haircut is lower too.

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Hi, is this a departure from the old rule? Sorry for digging an old topic but I keep reading conflicting answers at different places.
In one post above, you mentioned that intraday options selling can use 100% of the collateral margin. With the new margin rules (applicable from Feb 28, 2022), will that change and is the 50:50 rule now applicable to intraday too (Previously applicable only to overnight trades)?

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For intraday, you can continue to use 100% collateral margin. No change in this.

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Liquid funds are treated like cash similar to liquid bees.
50% rule is not applicable if you pledge liquid bees or liquid funds.

Is the above statement are correct?

All cash components are not applicable to the 50%rule, please confirm this.

If you have pledged cash-component securities you can utilize 100% of the margin. The 50% rule isn’t applicable. However, would suggest you keep some cash balance in your account to in case of losses and charges and collateral margin cannot be used towards this. Not having sufficient cash will result in your account going in debit balance on which interest will be applicable at 0.05% per day.

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