what is early pay-in transactions ? how traders can be benefitted from it ?
Early pay-in is when you fulfill your settlement obligation (funds or securities) to the Exchange earlier than the designated due date for the particular settlement. The benefits are that you get lesser margins levied for the trades you take on Exchange.
For example: In the SLB (Stock Lending & Borrowing market), the settlement is done on T+1, i.e if you are the lender of a stock, a margin of 25% of the value of the securities lent gets blocked. The stocks lent will have to be delivered to the Exchange on the morning of T+1. Now if your broker does an early payin of securities, i.e delivers securities to the Exchange on the evening of T day itself, then the Exchange gives benefit by not charging the 25% margins that would otherwise have been charged.
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