Smarter ways to fulfill 50% "cash" margin requirement. Any suggestions?

Ex: I have overnight F&O positions which require 10 lakh total margin. So, I will need to keep 5 lakh margin as Cash/cash equivalent. At present, I can fulfill the Cash margin requirement in 2 ways (on zerodha platform)-

(1) Buy and pledge liquidbees - More efficient way
(2) Keep it as simple cash

Any other ways to fulfill this cash requirement?? I know, we can pledge bank FD, but Zerodha currently doesn’t allow this (as per my knowledge).

Suggestions please, from experienced traders. Any better ways than liquidbees to deploy the cash and still fulfill the exchange requirements?

You can even pledge stocks, check this -

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Friends, I am specifically discussing the 50% “cash” margin requirement, which cannot be fulfilled by pledging stocks.

When an overnight F&O position is carried, we need to deposit 50% of total margin requirement in Cash/Cash equivalent. I am discussing about that 50% portion only.

Anyone? who has tried anything other than liquidbees as liquidbees returns are disastrous?

I too was looking for a solution, and found one, although it may not be practical for everyone.
Its also risky.

Banks, like Yesbank, ICICI etc issue loans against securities.
I found Yes bank products to be best for me.

They give u the $ in a current account, and u are only charged for the money u remove from the current AC, and only for the period for which u remove it.
Unlike regular loans, u dont have to pay continuous interest.

Hope this helps!

@Som_E, You are right, that is one way. We can purchase liquidbees from that cash and then pledge liquidbees with broker as cash equivalent. The effective interest rate paid to bank can be reduced by the 3 to 4 % received on liquidbees.

Any idea how much interest% Yesbank/icici charges for loan again securities?

@nithin Do you have any plans to accept Bank FDR or liquid MF’s as “cash equivalent” collaterals in future?

Its one big problem I am facing in growing my account with Zerodha. As you are currently only accepting liquidbees, I have to tie up 5 lakh cash in liquidbees at 3% if I have to carry 10 lakh worth positions (as an example). As the exchange allows bank FDR, I have seen other brokers accepting it where someone can earn a respectable 7 to 8%.

25-40% haircut on value of securities & weekly revaluation. If the equity value drops too much you might have to pledge more shares to continue your loan.

I rmbr it to be btwn 10-13% on the amt withdrawn from the current ac & only for the period for which it was withdrawn.

Hi AB1,

You mentioned about other brokers accepting FDR as a cash component. Is there a prescribed haircut for FDR by the exchange? Or do the brokers have the choice to decide.