Question related to margin pledging

[Ballas_Mathews]

Hello,

Today I pledged a few stocks for margin benefits. This is the first time I’m doing this, hence I’ve some doubts. Would be greatful if someone can help me with following doubts.

1. I’m planning to sell options intraday, no overnight positions. So would I be charged interest if I don’t keep 50% cash component in my account, even if it’s intraday?

2. What if I decide to sell a pledged stock because of some sudden bad news? Do I have to unpledge it first and only then will be able to sell it? Or can I sell it anytime if there’s no trading position using its margin?

3. Suppose I have pledged margin of 5 lakh and no cash in trading account and that day I make loss of 10 thousand. In that case will zerodha sell some of the shares to recover that 10k or will give me time until day end or next day to add that 10k to my trading account?

Will highly appreciate if anyone can answer the above. Thanks a lot in advance.

[Aoz]

@Ballas_Mathews

I’m planning to sell options intraday, no overnight positions. So would I be charged interest if I don’t keep 50% cash component in my account, even if it’s intraday?

As of now, interest will not be charged for intraday, provided loss is covered by cash balance but this may change in future:

@MohammedFaisal

While we currently have no immediate plans to charge interest charges for intraday positions, please ensure you have adequate margin in the right proportion at all times. This will help us prevent our capital from being blocked. We will notify you of any decision to charge interest on intraday positions in advance.

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@Ballas_Mathews

What if I decide to sell a pledged stock because of some sudden bad news? Do I have to unpledge it first and only then will be able to sell it? Or can I sell it anytime if there’s no trading position using its margin?

The latter one, Instant Unpledge.

@Ballas_Mathews

Suppose I have pledged margin of 5 lakh and no cash in trading account and that day I make loss of 10 thousand. In that case will zerodha sell some of the shares to recover that 10k or will give me time until day end or next day to add that 10k to my trading account?

In such case, interest will be charged (0.05% per day) if not cleared before end of day.

To understand when RMS would sell pledged shares, refer here: Why were the shares I pledged squared off?

[raghav.95]

1. some brokers don’t allow positions without cash collateral

2. some brokers need 1 day to unpledge

3. holdings sell off to clear the negative balance usually happens on 5th day , unless you have submitted PoA.