Which is less riskier for writing options? Pledging stocks or using cash margin?


#1

As far as the margin is concerned, is there any significant difference between pledging stocks as collateral or using cash margin? I’m aware of the haircut that is applicable on using stocks as collateral as well as the one-time fee that some brokers charge.

But other than that, in case there is any problems with my broker, is there a downside in keeping cash in my trading account? I assume that my equity positions are protected as they are in a separate demat account (even though they are pledged), but what about the protection of my cash?

Hope the experienced members can help me out.