Pledged Margin use for F&O

I was reading the FAQ on using Pledged Margin and came across this - 50 % Cash mandate by exchange for overnight positions - Is this an OLD update? I thought exchange don’t mandate 50% cash for taking positions overnight and thus allow using 100% pledged margin without leading to debit balance and interest charge.

I know brokers like HDFC securities and 5 Paisa allows this and they don’t charge any interest if I take overnight position with 100% pledged margin. Please clarify if Zerodha has a different rule here.

I also find that HDFC securities allow even Option buy with pledged margin. Is Zerodha likely to have a revisit on this restriction?


It is still there. 50% of Margin needs to come from cash. Only 50% allowed from Pledged margin

Zerodha follows the SEBI rule as above (50/50). Other brokers may allow it at their own risk.

When you buy option, you pay the premium, which goes to the Option seller as cash. So You need to bring cash margin for buying options. Again, other brokers maybe taking risk and allowing it.

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How is it possible for other brokers do such stuff at their own risk ?
Aren’t all the brokers required to follow SEBI rule ? How is it possible for such brokers to do this at their own risk ?


From what I understand is, some rules are applicable to every trader and broker, which all brokers will implement.

But some points, SEBI advises as guidelines for Brokers to follow, all brokers will not implement them. Zerodha, as per thier RMS policy has implemented this.

When there is too much misuse of this, new regulations will be implemented making it madatory.

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If 50% cash component is not available, looks like Zerodha still allows to take position. What is the implication to account holder? An interest will be charged? please share the details? Is there any penalty? As I know at client level SEBI/Exchange don’t charge any interest for using 100% collateral margin


Just wanted a confirmation if there is any change in rule.

If funds are positive and cash balance is negative, only Interest shall be charged and not penalty. Right?

@ShubhS9 @siva

Right, only interest will be applicable on debit balance. There won’t be margin shortfall penalty.

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@ShubhS9 -

What is the "Particulars’’ description for the interest charged on -ive cash balance in the ledger statement?

Like for margin penalty, the ledger statement has following as the Particular -

"NSE F&O short-margin penalty for date 2021-XX-XX"

I also feel, Zerodha should have a list of all possible Particulars documented somewhere in ‘Support’ for easy reference of traders so that they can transparently understand all debit/credit transactions.

This will be posted under “Delayed payment charge”. Explained here.

The list of ledger entires is available here.

@ShubhS9 - Thanks for your revert.

I checked the link. Neither short margin penalty nor delayed payment charges are described in this link. May be it’s time for Zerodha to update the support page with all these and other charges that are levied. This will bring in more transparency.


Hi @ShubhS9 ,

Will margin increase in future if the price of MF/Share increases?

Ex- Today Bankbees are at 335. I pledged 70 Qty it today and get 20k margin.

In future, If Bankbees goes to Rs.400/share, then will the margin also increase for share which I pledged earlier?

I guess the Answer is Yes, as stated in below post…

Yes, the margin will change according to variations in the price of the security pledged. If the price increase, margin will increase, if price decreases the margin will reduce.