Purchasing & Pledging of GSecs?

Forgot to say something. When you purchase a bond with FV = 100 for 103, you stand to lose the capital of Rs3 at the end of tenue

If you purchase 10000 qty of 754GS2036 at 103 ie 10 lakh qty, you would need to pay 10.3 lakh and after tenure you will get back only 10 lakh. Rs3 * 10000 qty is loss in capital

Why is this so? I was reading something about dirty price and clean price but couldnt understand it properly. Does this have to do something with it?

Do the math work out at the end?

Invested Amt * no of years * %returns / year = Capital Invested + interest (recd in bank)

Govt will pay only face value of bond. that is 100. The reason it is trading at 103 could be bond is issued at high interest rate and now due to lowering of interest rate current yield is reduced so automatically face value will change as interest rate remains same as the level at issue time.

Suppose if bonds issued at face value 100 at 8 % interest. Govt will pay 8% interest and pay 100 back with face value at expiry. So if interest rates fall then face value will increase so new buyer gets same interest rate. But if current yield is 7 then face value will increase to compensate.

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Did you get any order confirmation from Coin on Thursday? When did the funds get deducted from the account?
@ShubhS9 I placed an order today, and post 8pm cutoff time, can’t see my order anywhere on the app. Nor has the amount been deducted/blocked. A confirmation mail at least should go out.

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I remember It was blocked once the cut off time is closed.

You can get details as above in coin app itself.

Once it is allotted, you will get a mail from zerodha with details. allotment/Mail may take 2-3 days i think.

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I haven’t yet purchased GSecs, but I have heard quite a number of people talking all rainbows about them. I am thinking of investing in GSecs soon.

Hello, any clue on how long before a new gsec issue is available for pledging? Asking specifically for 726GS2033-GS

This bond was issued on 6th February. You will be able to pledge once approved by the Clearing Corporation. They update the list once per month.


@ShubhS9 @Bhuvan

Why can’t we sell pledged Gsec or SGB or any cash equivalent component directly ?

It is loss of opportunity for unpleding & selling it on next day. Can we incorporate instant selling of pledged?

@Jason_Castelino : i had seen you had this question somewhere i couldnt get that thread. Did yiu get response for that ?

Nah. I don’t have hopes also.

Waiting waiting and waiting….

Allowing instant selling of pledged cash component securities is on our list of things to do.

Hello @ShubhS9

Just trying to understand , when we have instant selling of peldged stock , How different is selling of cash equivalent.

Onus should be on investor to make sure he still meets 50 percent cash equivalent. Otherwise penalize . 'm i missing something else.

Appox when can we expect this to be available?

Can we buy stocks for swing trades by pledging G-Sec ?

Hey @Dev_Anand

The margin obtained can be utilized for intraday equity trading, long and short futures, and writing options (equity and currency F&O).

@KarthikAcharya Can the margin obtained by pledging Cash Equivalents securities be utilized towards commodities Long and short futures? If yes then how do I choose whether I require the margin towards commodity A/c or equity If no any plans to bring this?

Hey @Chetan_Nahata

Commodity futures and options cannot be traded using collateral margins.

We are currently exploring the possibility of offering this option to clients.

If I pledged my GSec after purchasing from secondary market , will i receive the semi annual interest payment on record date?

Yes, you are eligible for receiving the interest payment. This will be credited directly to your primary bank account.

we can not sell, only non cash can be sold,

unpledge need for mf, cash components

Very strange but just got an email from Zerodha stating that “The clearing corporation has stopped providing margin against the shares of 736GS2052 and has removed it from the approved list of securities for margin pledge.”

This is a Govt of India issued bond so why would the Clearing Corporation remove it from their list when the maturity is a long way away?

This can create a serious situation for someone who might not have ready cash available to meet the margin requirement for open positions once the auto-unpledge happens and the available margin reduces…

Did any one else get similar emails for this or any other GoI bonds? Any idea why this would happen? .