I raised a ticket with Zerodha about this, but I still don’t understand the reasoning behind the restriction.
Here is the scenario:
I have LIQUIDCASE units that are pledged for collateral.
During normal market hours, I sell those pledged LIQUIDCASE units. I completely understand that, since the units were pledged, Zerodha has to send a request to the Clearing Corporation (CC) to release/unpledge those units so that they can be delivered against my sale obligation.
No issue with that.
But later, during the post-market session, suppose I want to buy LIQUIDCASE again using cash already available in my account.
I am not trying to sell pledged securities in the post-market session. I am only trying to place a fresh BUY order.
Zerodha Support told me:
The pledged holdings that were sold cannot be repurchased during the post-market session because a request has already been placed with the Clearing Corporation to release the shares against the obligation.
This is the part I don’t understand.
Why should the release request prevent a completely new cash-funded purchase?
As I understand it, these could simply be treated separately:
- Let the existing CC release/unpledge request continue.
- Use those old units to fulfil my earlier sale obligation.
- Allow my post-market BUY as a fresh purchase.
- If the newly purchased units cannot automatically regain their old pledged status, that’s fine. Credit them as normal/free holdings and I can pledge them again later.
Why does the fresh BUY itself need to be rejected?
In fact, Zerodha’s own article “Instantly sell pledged stocks on Kite” says that if pledged quantities sold during the day are bought back on the same day, the pledged quantity is reinstated and the collateral margin is immediately added back.
So what changes specifically once the CC release request has already been submitted before the post-market session?
Also, the NSE describes trades in the post-close session as Normal Market trades.
So I am trying to understand whether this restriction is:
- an actual Clearing Corporation/exchange/regulatory restriction, or
- a Zerodha OMS/RMS/process limitation because the pledge-release instruction has already been sent.
If it is genuinely a CC restriction, could someone from Zerodha please explain the exact mechanism?
Specifically: Why does releasing the old pledged units against my sell obligation prevent me from independently buying the same security with available cash?
Even if the pledge cannot be reinstated automatically, I don’t understand why the BUY order itself needs to be blocked.
Would appreciate a technical explanation from @Zerodha staff. @siva