Pledging and risks.

[KarthikAcharya]

Hy @Prat10

@Prat10

What do i need to remember when pledging?

you can check on this the link to for the details of haircut on the stocks you pledge.

@Prat10

And what are the drawbacks

I would not call it drawbacks but some important points:
You will not be able to use this margin to buy Options and only trade in MIS for EQ segment.
50% of the margin needs to compulsorily come in cash and the remaining 50% can be in terms of collateral margin. If you don’t have enough cash, your account will be in debit balance and there will be an interest charge also called delayed payment charges of 0.05% per day applicable on the debit amount. You can check on this link to know more about interest charges

@Prat10

2.Who and why, is providing collateral aganst shares without interest (Since for gold loan, for pledging they take interest rate)

Its a win win situation according to me as client would have another option to trade more and can gain more profit. For a broker he can earn some brokerage

@Prat10

3.since i will be using collateral for intraday,what will happen if i book intraday loss and money gets deducted from collateral?

if you start running trading losses on F&O using collateral margin, and don’t provide the requisite marked to market (MTM) additional capital, your position would be to squared off your pledged holdings to make up for the losses.