I believe government bonds are a good option. 10 year bond will give around 6.2 %. No default risk. Moreover I’f you sale after say 5 years, high probability of having some capital gain as for shorter maturity, rate of interest will be less.
Does it mean that you don’t receive the money at all or just delayed payment ?
I am talking about daily margin statement…ideally 80% of sold shares value should be added on T day to available cash margin but I have seen somehow it is not added to daily margin statement by Zerodha …due to which you could get a margin statement with negative balance and you may end up paying margin penalty
Some times EPI gets delayed by then we might have triggered the margin statement, it will not include the EPI value in what is received in email.
One can download the revised MS from Console the next day and it will have the EPI value. So, no need to worry.
Some times? I have seen that multiple times or in other words whenever I sold shares and checked that day’s margin …I never seen that 80% added to margin statement.
What are you talking about? I have not received margin statement anytime before 12 night even for a single day.
To my understanding - exchange charges margin penalty on the day it occurred and it charges penalty as per what broker reports to exchange. So if broker does not report correct margin on T day - it will lead to margin penalty by exchange ..we can not tell exchange - oh please go look at revised statement. @Vij @TradeB2B
Did you or anyone faced penalty for this reason even for 1 time?
I suggest you and Zerodha should spend time on fixing issues rather than arguing on public forum. If there is a problem and someone shares with others or bring to your attention …accept it with grace/be thankful and fix it …instead of defending and arguing like a paid robot/machine.
To answer you question if anyone got penalty - I don’t know about others. I know how I avoided the penalty which was very stressful and waste of time/energy. THEY SAY TIME IS MONEY so yes I paid penalty in terms of time and energy. @TradeB2B @Vij @rupeshmandal
We agreed with your feedback and said we will be working on it, and thanks for that. As you are saying if it is not added on MS there will be penalty and for that I am saying there will be no penalty as such and no need to be stressed, specific to this case.
Can you give me name of govt bonds you like?
SBI Savings Fund seems alright. No?
I am indifferent. For me only thing relevant is the yield for the tenure. I purchased from IDBI Samriddhi.
If i have collateral margin of say 10 lacs ( pledged liquid funds) and my margin blocked while taking the trade is say 5 lacs and the next day if there is a violent move and my margin requirement increases to 5.25 lacs, am I required to keep cash in my account? Cant this 25k increase in margin be blocked from the collateral margin? If i keep zero cash in my account will i get a margin penalty?
If the trade was a simple spread where say i sold 10 lots of 13500 put @Rs100 and bought 10 lots of 13400 put as a hedge at Rs50. So max possible loss is 50x75x10 = 37500.
Now assume market fell badly and my sold put goes up to Rs180 and gives me Rs80 loss. So the loss is 80x75x10= 60,000
But bought hedge also goes up from 50 to 110 giving a profit of 60x75x10= 45000
Now my question is will zerodha count my loss as 60,000 or 15,000? and accordingly block more margin
Curious - why would you purchase from idbi instead buying on coin?
if you buy from idbi …can you still pledge for cash potion of fno margin requirement?
Good question …am also interested to know.
Yes, we can pledge. Idbi samriddhi will deliver the sec in your demat account only.
I have felt that idbi samriddhi offers better yield for not so liquid gsec bonds. In coin we participate only in what government is auctioning.
Someone said using govt bonds for fno cash component is not advisable …one of the reason mentioned was lack of liquidity …so if you don’t hold till maturity …and you need money right away …you may loose significantly …
is this true? may be there are some bonds that always have good liquidly?
So apart from liquidity and I guess interest rate risk …is there any thing else you would think of as a con …?
If not…why it is not a better option than FD …(particularly for long term investors like senior citizens?
See for me it boils down to what I am ready to pay or not pay for liquidity.
FD also has premature penalty. Illiquid in gsec does not mean that at some lower value say .5 to 1 percent, one will not be able to sale. There are always buyers in those cases. Question is that whether you will really sale if u have invested 5 percent of ur financial wealth in that. If not and a rare case only, to he’ll with liquidity and why shall we pay on cost all over the years when in lifetime I will require it maybe once or not even that. People contribute in vpf, ppf etc and those time liquidity is even less.
1 final point, if u invest in say 10 year bond, after 5 years you will have capital gain also in all probability as lesser the period left, lesser is the yield. Out of this capital gain, if I lose some part as cost of liquidity, so be it.
Instead of gsec, one can invest in gsec funds also where this liquidity problem will not be there and tax advantages will also be there but it all depends on how onevis comfortable.
on idbi do they have transaction cost like Zerodha? - 0.06% or Rs 6 for every Rs 10,000 invested will be charged as brokerage.
Also, you said one can use gsec funds - so liquidity problem will not be there but direct buying gsec is more secure than gsec fund …mainly because the fund house can do something surprising like franklin did ?
And what about taxation - I read somewhere that investment through gilt funds have tax advantage over direct gsec because gilt fund is considered capital gain/loss while gsec is interest so tds is deducted every time?
There is 50 to 75 paise difference in buying and selling price for retail customers in idbi samriddhi. For me relevant point is YTM.
Like I said, tax advantage is there in gilt funds. Maybe I will try that also.
Fund or direct gsec is individual choice.