Comment on Online pledging of stocks for trading F&O

For holding overnight positions, the margin required must be funded with at least 50% cash and the remaining 50% can come in the form of collateral. In case you do not have 50% of the margin required in cash, interest is charged only on the shortfall in cash.
For eg: Say you have 40000 cash in your account and 60000 collateral margin and have taken a position which requires a margin of 1L. Now you need to have at least 50% of this margin required i.e., 50k in cash to hold the position overnight. The shortfall in cash here is 10k (50k – 40k). You will be charged interest on this 10k shortfall in cash.
In case, you make intraday losses and go into a debit balance, you will be charged interest on the debit balance.

View the full comment thread »