What is the best form of collateral for margin

I want to sell options and its not beneficial to keep large sum of cash in account with broker.
So I am trying to figure out which is the best form of collateral ?

  1. I think FD as collateral is best but none of the brokers I know accept it.
  2. Mutual funds? which one you suggest (I think only liquid funds are accepted but they don’t give much returns and still subject to market ups and downs?
  3. Shares (again subject to market ups and downs and on guaranteed results)
  4. Get a loan against real estate (again highly risky and interest rate we have to pay for loan can be quite high compared to profit we may make)
    AM I missing anything else?
  1. Liquidbees
  2. Liquid MFs which are not as volatile as high equity % MFs
    One more advantage is you don’t have to keep additional cash component for margin as collateral received from above both is similar to cash.

I understand cash equivalency but either bees or liquid funds don’t have any returns…hardly 2% And now due to change in budget dividend are are subject to tax. So I am still looking for better option if any.

Best way is to keep the amount in liquidbees, and pledge the units for margin. In this way you will be able to trade in FnO.

other options are

  1. bhart bond
  2. SGB

Whats the haircut and return in liquidbees ? Also, for overnight cash component would be extra or liquidbees is equal to it ?

Haircut - 8%
Return - Approx. 3 - 3.5%
Liquid bees = Cash (No other cash component required for Futures and shorting options)