Pledged margin for option buying enabled in Zerodha

F&O
43

Seems they charge 8%, we are the lowest in industry.

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44

@siva
Yes, you are correct. Fyers charge 8% haircut for LiquidBees. In their website it is noted as only 5%. But they charge 8% after taking into consideration daily VAR values. But they have not specified it anywhere.

Fyers-Haircut-cheating
Fyers-Haircut-cheating1911×996 101 KB

But fake margin emails in Zerodha and outdated chart interface. All Indian Brokers are almost of similar category. :innocent: :innocent:

45

Does this hold the same for MTM from futures as well?

46

Can you explain a bit more?

47

If I get some MTM loss in futures and my Funds stays negative, will I be charged interest for the same or will my positions be closed. At what point are the positions closed?

48

Yes, account will be charged interest if it goes negative.

Depends on how much you are short by, maybe if you are short by few thousands we may not close but if you are short by more we will, check this to get more clarity.

49

@siva , HI Siva, I have following questions -

  1. If I am selling naked options, then do I need to maintain 50-50 ratio just to get into the trade? What if this is intraday trade? Or if I sell option and then buy after 1 hour? Do I have to pay interest charges even for 1 hour trade?
  2. Spread options – What if I am doing debit/credit spead where my margin requirement has reduced, lets say from 2L to 50K, after buying option of 5k. In this case, what happens to 50-50 ratio and how much should come from collateral and from liquid?
  3. In above case, are there interest charges if the trade is intraday?
  4. In the same case, if I am holding trade for 1 day, interest charges will be application on which amount?

Thanks

50

We don’t charge for intraday usage, only if position is carried for next day.

Any margin blocked should be 50-50. If margin blocked is 50k then 25k from liquid and 25k from stock collateral.

No.

If carried over then on 25k it will be applicable assuming you don’t have any free cash or liquid collateral.

51

So, if I have 10L of equity, against which I got 8L of collateral. Then I can use entire 8L to sell options, I dont have to pay any interest charges here, but I have to close position before EOD. It has to be intraday trade. Is this understanding correct?

52

Correct.

53

@siva can I use mutual fund pledge margin(mutual fund) to trade on Commodity?

54

good evening @siva,

A few things are still not clear to me even after reading the 2 articles you linked above.
options-buying-using-collateral
squaring-off-positions

For the questions below, assume
cash balance=0,
pledged liquidbees=1L,
pledged stocks=1L,
position carried forward at least 1 day i.e. not intraday:

  1. at what exact point the positions are squared off? is it immediately when it reaches 80% loss from initial value? You mentioned 80% somewhere in the comments above but the exact number is not specified in the articles so just confirming.
  2. in case of shortfall, what is the order of selling off holdings? Pledged Liquidbees/liquidcase first or pledged stocks first?
  3. in case of shortfall, what is the magnitude of selling off holdings? Is the position always squared off entirely after it reaches 80% loss from initial value? Or it can also be partially be squared off?
55

You can.

56

  1. If you are not maintaining the exchange-stipulated margin, your position may be squared off to avoid the exchange margin shortfall penalty. If the account is held with a negative cash margin following an obligation/Options buy using collateral margin, we will liquidate pledged shares up to the extent of the debit balance

  2. Not incase of shortfall , If your account is debt (opening balance) , We prioritize selling of liquid assets such as (Liquid bees ,Liquid case except MF ) up to the extent of negative debt balance.

  3. Now in case of Margin shortfall ,as mentioned above if aren’t maintaining the exchange asked stipulated margins then your position(s) will be squared off first considering your risk.

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57

@siva Hi Siva, just one question on Pledge. I think I can not pledge SILVERCASE ETF which is product of Zerodha capital. Any reason why one can not, any plans to include it? because HDFCSilver can be pledged.

58

Broker has no say in deciding which can be included in pledge list, CC( clearing corporations) decides which is allowed to pledge based on some criteria.

59

@siva i hedge monthly fut with weekly option, after closing the positions im unable buy hedge for next week because profit from closed hedge is only settled next day so cash margin showing as negative.

can you guys give margin for unsettled credit right away under your DPC program, so we dont have to wait for next day to take position again.

60

This is not how it works. When you exit the position, most likely you should be able to take the position again, or you might have an opening negative balance or an MTM negative balance. So let us know your client ID so that we can check and explain…

61

What criteria is used for rejecting silvercase, when other silver like hdfc and uti silver etfs are provided margin? Could someone from zerodha fund house @ZFH (@VishalJain ) or @siva shed some light?

62

Check this.

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