Zerodha requirement of 50% cash of margin for F&O?

Hello,

Zerodha has a requirement that 50% of the stock margin which you use for F&O should be in cash in your account. Is this a requirement of SEBI or the exhange ?

It does not look like that because brokerages like ICICIDirect don’t have this requirement. You can utilize the full margin without having to keep any cash in account against it.

Thanks.

QUOTED: “SEBI mandates that 50% of margin has to come in cash”

I also have an account with ICICIDirect and I just confirmed with them. They do not have the 50% cash requirement. So is it Zerodha specific ?

Thanks.

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50% cash requirement is set by SEBI. However ICICI shows their working capital and fulfills cash requirement set by SEBI. Of course they make money from higher brokerage charges.

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The purpose of my query is how to maximize my returns.

I am doing Iron Condor trades in options where I am looking for monthly income on a certain capital. In this case, inspite of higher brokerage my rate of return will be higher with ICICIDirect because I do not have to block 50% of the margin as cash.

Thanks.

Also, collateral margin received on pledged liquidbees is considered as free cash. This is another alternative.

Also, if ICICI is exposing all your pledged shares as cash equivalent as well, then if you’re in a M2M loss and you don’t bring in the funds, then they can keep selling out your shares. Having 50% cash as cushion prevents this disaster from happening. Plus their brokerage charges, plain ridiculous to say the least. They make a lot of money from you even before you know it.

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If you can confirm that 50% margin should be in cash only if planning to hold overnight. If trader is going to square off the position intraday then it is not required… Can you please confirm this…??

Yup, 50% cash required only for overnight. Intraday can be done with collateral margin only.

Thanks @Srinivas You were super quick :slight_smile:

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