What is pledging?

Zerodha Zerodha trivia
41

So basically you charge 60 Rs + GST only when we pledge …not during unpledge correct?

42

Right.

43

Please help me to clear my understanding of pledging :

Suppose I have no cash available in my account but I have 1 lakh worth of Axis Liquid Fund - Direct Plan - Growth which is mentioned in the googlesheet with haircut 10 % as a cash component . On pledging I will get 90K margin as cash and I can use it to buy any nifty CE and can sell next strike of nifty ce and use the reduced margin as per new policy. Here I will not have to put any cash as 50% cash rule will not apply as the pledged fund is considered cash only. Is this scenario correct ?

44

You will still need funds to buy the Option, collateral margin can only be used to short Options.

2 Likes
45

if shares one pledged then margin available for how much times ? i means if i pledge today then margin available for only one day / one quarter or 1 year ?

46

Until you unpledge the shares.

47

Zerodha allows only 50% margin from stocks and remaining should be cash component for any leverage position. Do all brokers follow same margin policy? If not, which reputed broker offers more than 50% margin on stocks?

48

Means until i unpledge it is available in collateral margin till 91 days…after that it will automatically unpledge… Am i right?

49

We don’t push settlement of securities till the 90th day, we do it around the 85-86th day.

1 Like
50

Hello, I don’t see pledge option for DSP liquid ETF on console ,does anyone know why it’s not showing ??

51

Hello, is it just for option selling or to buy future as well?

52

Collateral margin you receive can be used for Equity Intraday, Futures (Buying and Shorting) and Shorting Options.

53

@ShubhS9

pledged and 50k is collateral available.
if the intraday position is 50k, does intraday trading also attract 0.05% interest charges?

54

No, using collateral for Intraday trading doesn’t attract interest charges.

1 Like
55

Hi . I have pledged hdfc short term debt fund . Collateral is added to equity margin . It is liquid equivalent right ??
Please help .

56

HDFC Short Term Debt Fund is not part of Cash Component securitues, you can check the list of Non-Cash and Cash Component securitues here.

57

Pledging of shares is one of the options that the promoters of companies use to secure loans to meet working capital requirement, personal needs and fund other ventures or acquisitions. … In case promoters fail to make up for the difference, lenders can sell the shares in the open market to recover the money.

1 Like
58

Can you share the duration when the pledged stocks will be automatically unpledged?
Like as you said it is every 90 days, is that the start date is considered from the day, the stocks are pledged?
Or is it fixed like January to march, April to June like that

59

Under the new pledge mechanism, the pledged securities remain in your demat account. So during the quarterly settlement, pledged holdings won’t be unpledged. Explained here.

60

Thanks. Query is resolved.