Comment on Online pledging of stocks for trading F&O

Nithin Kamath commented on 02 Feb 2016, 09:24 AM

Any position taken on the exchange, SEBI mandates that only 50% of that can be brought via collateral margin and the rest has to be brought via cash. If you don’t have cash, it is brokers working capital that gets blocked.

So irrespective of how much you have pledged, you have to minimum have 50% of position you have taken in cash. This is not applicable for intraday positions though, as margins are reported to exchanges only on an end of day basis.

If you have only 0.1lks in cash and take a position for 0.4lks. You are allowed to take position only 0.2lks with the cash you have on hand. For the rest 0.2lks position, you are using 0.1lkk of brokers capital and 0.1lk from your pledged stocks. So your account will be in 0.1lk debit, and interest will be applicable for this.

If you now make a loss of 15k, it means that you no longer have any cash in your account but actually a negative cash of -5k. You now have taken positions worth Rs 1.35lks, 67.5k + 5k = 72.5k will be the debit balance in your account. So interest will be applicable on this.

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