Introducing instant pledging
Traders need margin to take and maintain positions. Instead of keeping large amounts of cash idle, many use their existing holdings as collateral to get margin.
Until now, the margin from pledging was credited only on the next trading day. That one-day delay often became a problem when margin was needed immediately, whether to adjust positions, cover MTM losses, or meet a sudden increase in margin requirements. In such situations, traders had only two options: add fresh cash or exit positions.
With instant pledging, that delay is gone. You can now pledge securities and receive a collateral margin in about 15 minutes, instead of waiting until the next trading day.
What is pledging?
Pledging means offering the securities you already own, such as stocks, bonds, mutual funds, or ETFs, as collateral to receive trading margin. The exchange applies a small deduction, called a haircut, to account for price risk.
The margin you receive can be used for equity intraday trades and F&O positions.
How to pledge securities?
To pledge from Kite app:
- Tap on your user ID and then Portfolio.
- Scroll down and tap on Pledge holdings.
- Select holdings to pledge.
- Edit the quantities to be pledged
- Tap on Continue.
- Agree to the terms of service for pledging and click on Submit.
- Enter the OTP received on your phone and tap on Verify.
To pledge from Kite web:
- Log in to Kite.
- Click on your User ID and then Console.
- Click on Portfolio and then on Holdings.
- Click on Pledge holdings.
- Select holdings to pledge.
- Edit the quantities to be pledged, or choose to pledge all the quantities.
- Click on Continue.
- Agree to the terms of service for pledging and click on Submit.
- Enter the OTP received on your phone and click on Verify.
How instant pledging works
You can place a pledging request between 7 AM and 5 PM on trading days. The cost is ₹30 + GST per request, per ISIN, regardless of quantity. There are no charges for unpledging.
Once you submit a request, it is usually processed within 15 minutes. The status may show as successful, pending, overdue, or failed. Securities marked as pending, successful, or overdue cannot be pledged again on the same day.
After a request is successful, you’ll see a “P” icon next to the pledged quantity in your Holdings on Kite, and the collateral margin will be added to the available margin.
How collateral value is calculated
Collateral value is based on the previous day’s closing price, after applying the haircut.
For example, if you hold shares worth ₹100,000 and the applicable haircut is 9%, the usable collateral becomes ₹91,000. This amount shows under the collateral section in your Funds tab.
Selling pledged securities
You can sell pledged securities instantly by placing a sell order on Kite, without needing to submit an unpledge request.
Is the pledged/collateral amount something that I owe to Zerodha? If so, when am I required to repay it? If I am allowed to sell the pledged securities, how does the collateral mechanism work in that case? And what happens if I never unpledge the securities and continue holding or selling them while they remain pledged?
Hi Anish,
1. No. It is the margin value of your own pledged securities that the exchange allows you to use for trading.
2. You don’t have to repay the collateral. You only need to pay if you incur trading losses. Only the loss amount is payable, not the full collateral value.
3. You can sell pledged securities anytime. When you sell them, the shares are automatically unpledged, and the sale proceeds will be credited to your trading account.
4. Nothing happens. You can keep securities pledged for as long as you want. They will continue to earn dividends and benefits and can be sold normally.
hair cut is 10% ok. suppose I pledge stock valued Rs100000. in the morning and un pledge in the evening. how much amount i will get back ? is it 99970? show with an example
Hi Siddharthan, when you pledge securities, the haircut is not a charge or deduction. It’s only a risk buffer used to calculate how much collateral margin you receive while the pledge is active. So if you pledge stocks worth Rs. 100,000 and the haircut is 10%, the collateral margin you will receive is Rs. 90,000. Your shares still remain worth Rs. 100,000; nothing is deducted from their value.
If you later unpledge, you will get back the full value of your shares (Rs. 100,000). The haircut does not reduce what you get back.
When can we use this feature?
On T+0, or T+1, or T+2
Main requirement is it should work on T+0 or T+1
Hi Piyush, if shares are already in your holdings, you will get margin within 15 minutes. If you buy shares today, you can pledge tomorrow but margin will be credited on T+2.
How long that margin from pledged equity will remain in our account? when do we have to unpledge and any extra charges or interest for keeping that margin longer time?
Hi Sachin,
1. You can keep securities pledged for as long as you want, subject to them being part of the exchange-approved list. You can check it here: https://zerodha.com/approved-securities#tab-noncash_equity
2. There are no charges for keeping/using collateral margin. However, for overnight F&O positions, exchanges require that at least 50% of the margin comes from cash or cash equivalents, while the remaining 50% can come from non-cash collateral. If non-cash collateral is used beyond this 50% limit, interest is charged at 0.035% per day on the excess amount.
what are the interest charges for intraday index option selling positions, i have equity holdings and i want to pledge them and do intraday index option trading, How does interest applies for this scenario and should i maintain cash for intraday F&O positios as well?
Hi Ganesh, interest isn’t applicable for using collateral margin for intraday trades. And for overnight positions, interest of 0.035% per day us applicable only if you use non-cash collateral in excess of 50%.
PLEASE also arrange to provide Margin against Pledged securities for trades in shares on cash delivery also. This will help your clients in a big way.
PLEASE also advise how to create a TICKET for support. I am not able to create TICKETS for getting my problems/ queries redressed/replied despite multiple attempts.
Thanks.
Hi Dhrub, allowing collateral margin for MTF trades is on our list of things to do. Regarding your second query, sorry to hear about your experience. Will have someone from our team reach out to you at the earliest.
Team Zerodha, Make a Rework on trade from charts (TFC) Feature. Bring More Feature like trailing stoploss with traget, Stoploss.
Hi, we are continuously working on adding more features to make your experience better. Thanks for your feedback.
any interest will be charged after using the pledged funds
What is rate of interest on pledged securities
can we sell pledged Mutual Funds directly without unpledging them which take a day?
Yes, you can sell pledged mutual funds without unpledgeing from Coin.
Please allow pledging collateral for delivery and mtf trades as well.
This is on our list of things to do, Shailendra.
Is it for intraday trading,or can it be used for MTF for delivery….If yes what is the square off period for the shares which bought with the margin of pledged shares..(365 days or more)
Hi Sunder, collateral margin can currently only be used for intraday and F&O. For MTF, it is on our list of things to do.
there are some issue in your system, we can pledge T+1 collateral and It is accepted but we can not get the margin. Team Zerodha please work on that this is serious issue.
having same issue not credited within 15 mins
Hi Akshay, if shares are already in your holdings, you will get margin within 15 minutes. If you buy shares today, you can pledge tomorrow, but the margin will be credited on T+2.
Hi Ravi, if shares are already in your holdings, you will get margin within 15 minutes. If you buy shares today, you can pledge tomorrow but margin will be credited on T+2.
Margin previously was only used for option selling…can it be used for option buying as well..??
Yes, Suman. Margin can now be used for buying options.
How do i return the pledged amount back and take back my shares?
If you could explain the procedure it would be helpful. Is it as good as ”Add funds” ?
Hi Akil, for that you just need to unpledge the shares and can do it from Console: https://support.zerodha.com/category/console/portfolio/pledging/articles/how-do-i-unpledge-shares
If you want to sell pledged shares, you can do it from Kite by placing regular sell order; no need to place unpledge request.
What is interest rate ?
Hi Deval, there are no charges for using collateral margin. However, for overnight F&O positions, exchanges require that at least 50% of the margin comes from cash or cash equivalents, while the remaining 50% can come from non-cash collateral. If non-cash collateral is used beyond this 50% limit, interest is charged at 0.035% per day on the excess amount.
There is not interest charged on pledge margin as long as you are maintaining cash equivalent to your loss in trading
What is the interest rate charged on pledged shares apart from 30+gst?
Also if multiple securities are pledged at once, does the charges still 30+gs
Hi Manohar, there are no charges for using collateral margin. However, for overnight F&O positions, exchanges require that at least 50% of the margin comes from cash or cash equivalents, while the remaining 50% can come from non-cash collateral. If non-cash collateral is used beyond this 50% limit, interest is charged at 0.035% per day on the excess amount.
The charges of Rs. 30 + GST are per scrip, per pledge request.
Rate of interest and charges please explain
Hi Bala, there are no charges for using collateral margin. However, for overnight F&O positions, exchanges require that at least 50% of the margin comes from cash or cash equivalents, while the remaining 50% can come from non-cash collateral. If non-cash collateral is used beyond this 50% limit, interest is charged at 0.035% per day on the excess amount.
For pledging, there is a charge of Rs. 30 + 18% GST per scrip per day. There are no charges for unpledging.
In regard to Instant pledging of shares under portfolio, please advise,
1. What is the interest charged on the amount utilised?
2. What is the duration of leveraged amount available in the account…till the shares are pledged, right?
3. Haircut of 10% as per your scheme means a margin of 10% on the leverage allowed against pledged shares?
Hi,
1. There are no charges for using collateral margin. However, for overnight F&O positions, exchanges require that at least 50% of the margin comes from cash or cash equivalents, while the remaining 50% can come from non-cash collateral. If non-cash collateral is used beyond this 50% limit, interest is charged at 0.035% per day on the excess amount.
2. You can keep securities pledged for as long as you want, subject to them being part of the exchange-approved list. You can check it here: https://zerodha.com/approved-securities#tab-noncash_equity
3. No. A 10% haircut does NOT mean you get 10% margin. It means 10% is deducted from the value of your pledged securities, and the remaining 90% is what you get as collateral margin, which can be used for trading.
Cost per pledge is very high. And I do not think you could pledge mutual funds, yes?
Can we have SLB feature
Hi Vikram, we currently offer SLB through offline mode and are also working on providing it online. You can check out more details on SLB here: https://support.zerodha.com/category/trading-and-markets/trading-faqs/securities-lending-and-borrowing
Can we invest proceeds of pledged shares in taking delivery of equity (Stocks) or can we us it only for INTRADAY trading?
Hi, you cannot use margin for taking delivery of shares; for this you will need cash. Collateral margin can be used for intraday and F&O trades.
I understand that:
”The cost is ₹30 + GST per request, per ISIN, regardless of quantity. There are no charges for unpledging.”
However was wondering if there was any interest charged on pledged shares?
Thank you.
Hi Rupinder, there are no charges for using collateral margin. However, for overnight F&O positions, exchanges require that at least 50% of the margin comes from cash or cash equivalents, while the remaining 50% can come from non-cash collateral. If non-cash collateral is used beyond this 50% limit, interest is charged at 0.035% per day on the excess amount.
Good initiative by Zerodha. From when is it applicable?
Hi Srini, this feature is already live.
If I buy a holding today, then can I pledge it immediately to get its collateral within 15 minutes? Or is this feature only applicable for holdings present in demat account after (T+1) days?
Hi Akhil, if shares are already in your holdings, you will get margin within 15 minutes. If you buy shares today, you can pledge tomorrow but margin will be credited on T+2.
mtf position ko bhi pledge kr skte hai kyaa?
Hi Mohit, no, MTF positions are already pledged and cannot be pledged for margin.
A great feature that is already supported by other brokers but was missing in Zerodha.
One question: Do we get margins on T+1 or T+2 ?
Hi Sudsun, if shares are already in your holdings, you will get margin within 15 minutes. If you buy shares today, you can pledge tomorrow but margin will be credited on T+2.
Can i pledge shares bought on MTF?
Hi Manjunath, MTF positions are already pledged and cannot be pledged again for collateral margin.
Can we have SLB feature as well?
Is it for intraday only??? Or is it possible to pay n receive delivery???
Hi Praveen, could you please share more details on your query?
Hi Kamlesh, we currently offer SLB through offline mode and are also working on providing it online. You can check out more details on SLB here: https://support.zerodha.com/category/trading-and-markets/trading-faqs/securities-lending-and-borrowing