Comment on Online pledging of stocks for trading F&O

Priyank Nevatia commented on 20 Jul 2017, 04:10 PM

Dear Nitin,

I had two questions for you. I have spoken to the support team of Zerodha but I am still unclear so posting here.

1) I want to pledge 50% stock (after haircut) and put 50% liquid bees (after haircut) am looking at 25L stock and 25L liquidbees to start with and go upto 1cr stock and 1cr liquidbees. But I want to ensure my trade is squared off if I do not have M2M balance. I do not wish to touch my margin money to service M2M loss. I prefer my trade being squared off keeping the margin money strictly for margin use. Is that possible ?

2) I am in the process of forming an LLP with a friend of mine. For which we will open a trading account with Zerodha. Can I pledge stocks in my personal name and get margin against it in the LLP account ? I will be 50% partner of the LLP. I do not wish to buy the stock in the LLP name as the partnership is strictly being formed to trade F&O. But I have a lot of long term stocks in my DP which are just sitting idle so would like to use those stock to get margin (keeping the 50-50 stock and cash ratio). And the first question is related and relevant now cause I would not like to risk my personal stocks for M2M loss of the partnership firm where I am only 50% partner. It also makes the trader discipline where in he is forced to square off without M2M balance.

3) If not for trading, can we pledge shares to Zerodha to be used as margin funding for other traders and receive a premium / interest on it. So for a stock I am holding long term, I get additional income over and above the appreciation in the stock. If Yes, what rate of interest are we talking about. A ball park figure.


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