Online pledging of stocks for trading F&O
Traders,
You can now pledge almost 1000 approved securities (Stocks & ETFs) to get collateral margin which can be used for trading futures and options on equity and currency.
Pledging a Stock
Visit the holdings page on Console and in the holdings table, hover the cursor on the stock you want to pledge and click on ‘options’ and select pledge for margins.
Once you do, you will get a pop-up, which will show how much margins you will be eligible for. Enter the quantity you wish to pledge and click on Submit
You now need to authorise your pledge requests as explained in this post.
- For all pledge requests placed before 4:00 PM, the collateral margin will be available to trade on T+1 day (next working day). All requests placed after 4:00 PM will be processed only on the next working day.
- Margins will be provided after the applicable haircut. Check this list for the applicable haircut on various stocks. A haircut of 10% would mean that if you pledged stocks worth Rs 1 lakh, Rs 90,000 (90% of 1 lakh) will be added as collateral margin to your trading account.
- You can see this margin under the heading Direct Collateral on our trading platforms Pi (desktop), Kite (Web/mobile), and NEST.
- You will be able to use this entire margin after haircut for taking intraday or overnight positions in Futures, and for writing Options of equities, indices, and currencies. You will not be able to use this margin to buy Options or take further positions on the equity segment.
- Exchanges stipulate that for overnight F&O positions, 50% of the margin needs to compulsorily come in cash and the remaining 50% can be in terms of collateral margin. If you don’t have enough cash, your account will be in debit balance and there will be an interest charge also called delayed payment charges of 0.05% per day applicable on the debit amount. So assume you take positions that require a margin of Rs 1 lakh, you will need at least Rs 50,000 in cash irrespective of how much collateral margin you have. Assuming you don’t have this Rs 50,000, whatever you are short by will be the debit balance for the day, and interest will be applicable for that amount. Check this link for more information.
- Liquid bees are considered as cash equivalents by the exchange, so the above 50% rule wouldn’t apply. So margin received from pledging liquid bees will be as good as having cash in your trading account.
- All interest accumulated will be debited once every month on the ledger. A link to see cumulative interest calculation can be found on the holding page itself. Check the picture below.
- All pledged stocks will be debited from your demat account until they are unpledged again. The entire process of pledging and unpledging will cost Rs 30 per scrip irrespective of the quantity. So if you pledge 100 shares of Infosys and 200 shares of Reliance, the total cost (pledging + unpledging) will be Rs 60 (Rs 30 x 2). This charge will be debited from your ledger the day you place the pledge request.
- You will continue to get benefits of all corporate actions like dividends, splits, bonuses, etc. on the stocks you have pledged.
Unpledging a stock
On the Holdings table in Console, you can see the pledged quantity marked next to the symbol name. Hover your cursor on the stock and click on ‘Options’ and choose ‘Unpledge’. 
Enter the quantity you wish to unpledge and click on Submit
- For all unpledge requests placed before 2:00 PM, stocks will be credited to your demat account on T+1 day. Any request after that will be processed on the next working day. So for example, if you unpledge at 1:00 PM on Monday, you will get the credit of stock in your demat account before trading commences on Tuesday. Anything unpledged after 2:00 PM on Monday, you will receive the stocks only before trading commences on Wednesday.
Do note that if you start running trading losses on F&O using collateral margin, and don’t provide the requisite marked to market (MTM) additional capital, we will have the right to square off your pledged holdings to make up for the losses.
Pledging of stocks is a good way to run strategies like covered calls (pledge stock and short OTM call options), arbitrage between stock and future, and also for taking higher leverage. We will soon start accepting mutual funds also to provide collateral margin.
Happy Trading,
Nithin Kamath
Founder & CEO @ Zerodha. Partnering startups through Rainmatter. Love playing poker, basketball, and guitar. @Nithin0dha on Twitter. | Personal website: https://nithinkamath.me
Thanks Sir for this product really easy for client to pledge , few query can we use this margin for Cash segment for intraday and pledge for Zerodha and IL&FS Dp both?
No, the margin can be used for FnO trading only. Yes both ILFS and Zerodha DP will work.
Thanks for clarity
Hi. Nitin, I am confused now. When i asked the same question from your support team I got the response as below
Q. Could you let me know if the collateral margin is available for shorting stocks intraday.
A. We would like to inform you that you can’t trade in Equity using Collateral margin.
Satya, ideally speaking this margin can’t be used for trading intraday equity. The onus is on you, but yeah once the margin is in your account, we can’t stop you from trading intraday on it.
Dear Sir ,
Can We expect BO in Kite by this February End .
Hello,
Can you please add BO(bracket order) for commodities on kite? This will be very helpful for the on the go people like most of us.
Thanks,
Exchanges are yet to give approval for bracket orders on MCX.
Can we use the margin available after pledging of shares in Commodity Trading ?
If yes then how ??
Not possible.
What are Liquid bees ?..
https://tradingqna.com/t/what-are-liquid-bees/148
Hello Nithin,
Whether pledging of Mutual funds is available now?
If not when we can expect?
Best regards,
Arun
Hi Nitin, any update o the above question. Can we pledge MF unit held in coin as collateral for F&O
Hello Sir when will you enable BO in commodities….other brokers allow it plz look on this asap
Hi,
Today my cash and collateral margin was showing 1 Lakh +, but an order to buy 50 shares @ 1365 was rejected. The reason provided was cash margin is insufficient. Why was my collateral margin ignored for this trade?
Hi,
As per new margin rules, you need to have 50% of the margin money in the form of Cash. May be cash component was not sufficient.
Dear Mr Nithin,
Could i use the pledged money for intra day ?
Hey Sangeet, yes, you can use the margin received from pledging securities for intraday trading. You can learn more about pledging here.
Sir,
Kindly post a list of the 1000 approved securities.
Click here
Hi Venu
Please check that this list shows haircut for Amtekauto as 100% and collateral margin as zero.
143 INE130C01021 AMTEKAUTO 100 0
Please correct it if it is incorrect.
Sir, what will be the interest % if i pledge for more than T+1 day.
Interest % for pledging 2 months or 3 months.? Or even 5 days to 10 days.etc.
Siddharth, interest is applicable only if you don’t have atleast 50% of total margin in cash. On the shortfall the interest is 0.05% per day.
Compounded on a daily basis ? What is the annualized rate?
20% per annum.
if 20% per anum, then what is the use of pledging. ?? inorder to save 7% interest on liqid fund, we need to spend 20%…. isnt it a foolish plan… ? correct my understanding, appreciated.
You don’t need to pay the 18% interest as long as you have sufficient margins. The penal interest is only chanrged if you have a shortfall in the cash required to hold the position, if not there’s no penalty.
Hi, incase the cash margin goes below 50% as required, will I be informed about the shortfall and told to add cash or only interest will be charged?
Hey Sachin, yes an SMS and email are sent out when you have a margin shortfall. In such cases, you can either add funds to your trading account or reduce your position size. More here.
hi nitin my question for you a genius of market
i have heard many people saying that if we place stoploss order then those orders are visible to some operators and they will hit all those orders by there counter orders is it true? if it is true then what is the solution to over come from this problem?
Hi Nitin,
I want to pledge my shares and want to buy Options. Is that possible ?
Regards
Padam
Padam, you will not be able to use this margin to buy Options or take further positions in the equity segment. In case of option buying there is no margin blocked, so you need to have cash in your account.
so if i collatrilise stock to sell options and i cant buy then how do i hedge ? i dont get it
You can short options to hedge your equity portfolio.
Dear Nitin
I was wondering if stop loss hunting exists in reality in the market? This is very important for us small time traders to know because then all the time when we will be stopped out by those stop loss hunters and incur losses. Hope you throw light on this so we can accordingly size and plan our stop losses.
Thanks and regards.
Saroj
If i have 1,00,000 (cash balance) and 50,000 (Margin from pledge). In case I use total 1,50,000 in F&O I will not be charged right.
That’s right.
If I have 100000 of pledged liquid bees and 50,000 Margin from pledged mutual funds. In case I use total 1,50,000 in F&O, I will not be charged right? (I do not have any cash balance)
Can I take collateral margin on unrelated stocks, say Dr Lal Path labs & NBCC and use the collateral margin to pay for 50% of the margin required for selling a covered call option position on NTPC?
The reason I am asking is that I am 150 shares short of the lot size of 4000 on NTPC and either I have to buy more shares of NTPC to put up 50% margin or I can cover this margin requirement by pledging unrelated shares.
Please let me know if this is allowed. If there is any strategy which can be used to come up with the collateral margin for selling covered calls if one is short of lot size by 100- 500 shares on lot sizes ranging from 4000 – 8000?
Yep allowed. Once you get collateral margin, we don’t track where you use it.
Hi sir…. kite is very user friendly n I lov this app n zerodha…. but the only thing which is making incomplte is bracjet trading for stock options. When we can expect this?
Stock options are illiquid, so providing brackets is very risky.
Why dont we have BO for Index options like for BankNifty or Nifty?
Hey Pradip, we do allow BO for index options.
Sir, following is the sequence of transaction for which I want to know if I have to pay interest / delayed payment charge.
Fund in rs 4 lac
Bought 300 liquid bees and short 2 lot nifty option. Bal approx 17 k
Pledge 200 liquid bees now Bal showing 2 lac. Bought 100 liquid bees more assuming 1lac + cash balance in my account and collateral value will be used for option margin. Thanx.
Liquidbees is considered part of the cash component, so ideally no dpc should be levied.
Thanx. And what about dividend on the pledge liquid bees. In whose account it will be credited. Will I be getting the amount / no of liquidbees. and what is the methodology.
If you’ve pledged stock, we will receive the dividends. We reconcile them on a periodical basis and credit them to your demat account.
Please explain the process?
Hello,
I have a question related to SBI Nifty50 ETF. As per latest doc 10% is haircut. Is it treated same as cash component just like Liquidbees ??
Regards,
Divakar
AFter pledging the stock can I use that margin amount for currency trading and what all the charges for the pledging stocks and please tell if there is any hidden charges for that.
Ashish, pledging/unpledging is charged at Rs. 60 per request. No hidden charges. Yes, you can use this margin to trade currencies.
Hi nithin. I am a active trader in fo market. Have acc in zerodha. Would like u ask u why zerodha doesn’t take fd in form of collateral in fo market. Other brokers does take it in fd form.
Hi Nithin. Why we @ zerodha don’t take FDRs for margins? By when we can have the facility in place?
Any Update on the above?
Hi Nithin,
Regarding pledging of share, you mentioned Liquidbees are considered as cash only. Does it include NIFTYBees also? Also can I invest such margin in Nifty options & futures?
Rgds
Pradeep
No, only Liquidbees are considered cash equivalent.
Hello Nithin,
Whether pledging of Mutual funds is available now?
If not when we can expect?.
Best regards,
Arun
Hi,
The pledged shares value which i will get for margin, will be of current market price(total) or my buying price of that particular shares.
For example- I bought reliance 100 @ Rs 800- My total Value will be 80000/-, but current market price is now 95000/- so will i get margin on Rs 95000/- or Rs 80000/-???
You’ll get margin after haircut on the current value of the stock holding.
Do you plan to allow the facility of pledging Mutual fund holdings(debt/liquid/equity) for margin money ?
Dear Sir,
Currently, I have invested substantial amount of my total investment in Reliance Nippon Liquid Bees as a cash collateral. I want to diversify the risk of Reliance Liquid Bees into liquid bees of different AMCs.
Can you please please suggest any other AMC’s liquid bees which can be considered as a cash collateral?
Hello, please provide us the unlimited stocks script option in zerodha kite. As there are many brokers offering this kind of system and there software is good to hold it and doesnot get hang, it will be pleasure, if you offers unlimited stocks script in zerodha kite…
HI
Mutual funds are safer then direct stocks in terms of volatility and permanent loss of capital so why we are able to pledge mutual funds for Margin funding
Up to when we are planning to introduce margin funding against mutual funds for F&O trades
This is on our to-do list, however, pledging mutual funds is quite complex, when compared to stocks, hence the delay. Can’t really commit to an ETA right now, but I can assure you that we’re working on it.
Say , I pledged a share when market price was 243.
After haircut, I got 232/share. (232 x 1000 = 23200)
But, while unpledging the market price of share is 275.
What will the amount deducted on unpledging?
232 or 275 or 243 / share ?
Hey Avishek,
as the share price fluctuates, your collateral amount will be adjusted accordingly.
Say, the share of Rs 100 with 10% haircut was pledged, you have Rs 90 as collateral. The next day the share price is Rs 110, your collateral value will be Rs 99. The cost of pledging at Zerodha is Rs 60 + GST per pledge request. There is no cost for un-pledging.
Hi, collateral margin can we used for option selling for whole series or only T+1 days ?
Regards, Maddy.
Hi, is the pledging feature available on mutual funds now? If not by when can we expect it ?
Hi Yella, you can now pledge some liquid funds. We’re adding more funds to this list with time.
Will you please clearify. If I have 1 lot of sbi shares in cash market and the same is pledged with Zerodha.
After that I short a call of 1 lot of sbi and the strike price is tiggered then how the physical settlement takes place because the underlying securities are not in my demat account but it is with Zerodha(as the same is pledged).
Shall I buy in delivery using pledged margin value?
How many days I pledged ,is it any time limit?
You can’t use pledged stocks to buy more stocks for delivery.
if we use Liquid Bees as collateral and dont have any cash, will we be still charged interest?
No.
Hi Nithin, why don’t you let us buy/earn some stock options in Zerodha? I think it would be a great incentive to keep using Zerodha. Let’s share some success 🙂
Sir I was searching for this information, kindly reply, whenever i unpledge the stocks , will you include the haircut back plus with my collateral margin or i have to pay separately the haircut money from my pocket.
HI @Nitin
My question to you is if have 10 Lacs rupees in my account i have purchased the Liquid mutual fund and have pledged all that money (90%) collateral value l have received which is 9 lacs , can i use all that 9 lacs Rs for option selling ?
Other brokers giving pledge margin for equity why leading discount broker not giving it.
Can we use collateral margin for buy and sell commodity futures intraday ?
Hey Jadeja, collateral margin can be used for trading Equity Intraday, Futures long & short & Options writing and not for commodity. Explained here.
sir is there any yearly charges for pledgeing shares , as like AMC of zerodha is there?
What is mean by Pleaging?
If you have stocks sitting in your demat account, you can pledge them to get trading margins for F&O. Do go through the blogpost above.
have you any plan to give margin against MF
Will take us a bit more time.
Please make Pi suitable to open more marketwach
Pledge is an activity of obtaining margins against an asset, securities in this case. You could pledge shares that you’re holding in your demat account with your broker, receive margins against such pledged shares and use these margins to trade in the F&O segment.
In case you make a trading loss with the pledged margins, the broker can sell your shares to realise the losses.
I understand that Zerodha has the right to square of shares in case we do not provide MTM. But what is the extent till which you will not sell the shares.
For example we have provided collateral for INR 100k. No Cash Margin. utilized INR 50k as Margin. I will be charged 0.05% interest / day on 25k. But till what level of MTM you will not sell any shares. And If we have pledged more than 1 script how you decide how much and which stock will be sold?
Om, it depends on market volatility on when we square off your holdings. Ideally we don’t prefer to do this. If the value of your collateral drops below the SPAN margin requirement, it will get squared off. If more than 1 scrip, our system picks the stock and it is random.
Hello Sir,
I am having little difficulty in understanding the interest charge. I have one lakh in equity, hair cut is 10% so i can pledge upto 90,000 rupees. If i want to take a position of 50,000 rupees in F & O, will i be charged interest and i do not have any amount in cash ?
Yes Kalyan, to take 50,000 position, you need to have 50% of it atleast as cash as per SEBI/exchanges.So if you have no cash, you will be charged interest on Rs25000 when u take the 50k position.
Thanks Nithin for your prompt reply. In ICICI Direct, i do not see a charge of interest. If it is SEBI defined rule, is it not applicable for all brokers ?
A few brokers who charge % brokerage don’t charge this interest. I guess the brokerage makes up for much more than their interest cost.
Thank you Sir 🙂 Really appreciate it
How much longer can i carry the position by paying interest on short cash of 50%,if i have more collateral than transaction value but no cash in account?
You can hold it as long as there is sufficient margin (cash + collateral) in your account. However, in such a case, you’ll be charged interest at 0.05% per day on the shortfall in cash margin.
Thank you.
If stock available in my demat AC can u giving me limits in NSE cash please clarify
No Prakash, exchanges don’t allow this.
but in sharekhan they allow me buy against my shares in dp
9464948523
In true compliance sense this shouldn’t be done. Especially after the new SEBI enhanced supervision rule that went live from July.
I would like to pledge my holdings to buy stocks on NRML basis just like in Reliance Securities and ICICI direct.
Please provide seven days leverage to settle the amount
thanks
Not able to do an online pledge in the new Console interface. Also the ledger report is screwed up in the sense – the entries are sorted in ascending rather than the earlier descending. The name of the report earlier was intuitive (displayed the period of the report) but now it is a report with just my client id, which is not beneficial. Lastly, the columns in the report allowed to put filters and check the entries, the new report does not allow that
dose zerodha provide maring against the government bonds which are approved by nsccl
Hey Pritesh,
We aren’t providing margins against G-bonds presently. Its on out list of things to do. We will keep you posted.
Share Pledging: When can we expect REITS (like Embassy office parks) and Invits (like IRB Invit and Indigrid) to be available to pledge.
any updates on this?
Very Good Question.
I have just bought Mindspace REIT. And I wish to pledge it. Coz its a long term game.
Zerodha can I pledge Mindspace REIT and what’s the haircut in this scrip?
Hi,
Anyone has any update on this?
Looking to pledge PowerGrid InvIT and Embassy REIT to avail margin?
Is it possible in Zerodha? If yes, how much is the haircut?
Securities that can be pledged for margin are decided by the Clearing Corporation. Currently, CC hasn’t added REITs and InvITs to their approved list. If and when these are added by the CC, you will be able to pledge. You can keep track of the approved list for more information.
How come kotak securities is accepting REIT and INVIT for pledging?
Hi Surya, these securities are yet to be approved for margin pledge by the clearing corporation (CC). We will accept pledge requests in these securities once the CC has approved them.
I HAVE A QUESTION REGARDING THE PLEDGING AND UN PLEDGING OF SHARES WITH ZERODHA.
IF I PLEDGE 100 SHARES OF RELIANCE @ CMP 1500, AND UN PLEDGE THE SHARES AFTER ONE MONTH, WHEN THE CMP OF RELIANCE IS SAY PLUS OR MINUS, WHAT WILL I BE RETURNED BACK IN MY DEMAT ACCOUNT WHEN I UNPLEDGED. SHALL IT BE THE CURRENT CMP AT THE TIME OF UN PLEDGING OR IT SHALL BE THE SAME CMP ON THE DAY OF PLEDGING. I MEAN THE ADVANTAGE AND DISADVANTAGE PART OF THE CMP FLUCTUATIONS IS WHAT I WOULD LIKE TO KNOW ABOUT.
I COULD UNDERSTAND THAT, BONUS, DIVIDENDS, ETC SHALL BE CREDITED TO CLIENT ACCOUNT.
KINDLY GUIDE ME ON THIS.
REGARDS
SUKETU DAVE
I have not received dividends for my Pledged shares of HUL (50 nos) . As I already received the dividends for my unpledged shares which was credited to my account on 03 rd July 2020.
Dear All
CAn i buy shares for long term against Pledging .
No sir, Only amount can be used against Trading in NFO sector only.
Hello Nithin,
If happens to I have pledged a my shares worth of 1 lakh and got an additional Margin of 90k, And I traded with that money and got the profit of around 90k(100% return) on While trading on FNO. What will be the charges applicable and Margin available after un-pledging my shares and all. In profit share of 90k How much will Zerodha will be charging me for?
Thanks,
Vijyeta
Will Liquid Funds be considered as cash equivalents ? or just Liquid bees!
Yes, it’ll be considered as cash component. Please check the list of liquid funds which can be used as a collateral in Zerodha.
Is Zerodha is accepting FD has a collateral for F&O trading ?
Hey Shekar, no we aren’t. More here
Hi, I m interested in starting a trading account. I have an NRE/ NRO account with YEs bank and currently living in Canada. Went through some online forums where many posts came up showing that residents in US/ Canada cannot operate a trading account in India. Can you please throw some light on this.
Thanks,
Teja
You can’t open a normal trading account, but you definitely can open a NRI trading account. Check this:http://zerodha.com/z-connect/zerodha/open-an-account/nri-trading-on-indian-stock-exchanges
Hi,
I had the same problem before. I got NRE/NRO account in Yes bank and I am from Melbourne, Australia. I wasn’t able to open Demat account here. However, luckily I had Normal savings account with Axis bank before 10 years. So, with that account, I have opened Demat account with Zerodha, and I am very happy with the services of Zerodha so far, specially with their PI software trading platform. I am applying in good quality IPOs and buying A category shares in Delivery.
You can also try with this option if you got any saving or joint account with your parents in India.
Cheers
Ashish
I am Zerodha account holder. Please answer the below queries:
1) What is the minimum/maximum value of holding that can be pledged/unpledged?
2) You mentioned that 60/- per scrip, but in the example mentioned by you (Reliance and Infosys), 2 scrips are pledged. So, the total charges should be 120/- for pledging and 120/- unpledging
3) Does the value of the collateral varies everyday based on the underlying value of the pledged holdings ?
1. There is no minimum/maximum value.
2. Cost of pledge+unpledge together is Rs 60, so Rs 60 for infy + Rs 60 for reliance.
3. yes, the margin given will change everyday based on the value of collateral.
can you share somestocks idea where i can invest for 15 /20 years term
If Margin given will change everyday on the basis of value of collateral, then how does it impact to ‘margin given on FnO trading’ out of collateral margin?
It is simple. If you’ve used your collateral margin amount completely and your value of the pledged stock goes down, you’ll have to bring in the money to cover your F&O margins.
U want any details call me sir I will guide u
I am one of client of Zerodha.
Alwasys checking Zconnect for new post/blog.
Z Team is working very hard and bringing innovative tool for traders,investors.
According to me this post is just for those traders who are experienced and have little money
not for novice and few yrs experience traders.
I am not discouraging clients to not take benefit of it.
this is really great option to trade money from small capital – but that requires great amount of emotional control and money management.
so i would request to use is at as last weapon.
for small traders whose capital is below 1 lac : Play small and play safe , try to build capital first.
for big margin in account or big traders : this is of no use.
for experienced traders with little margin : this is useful tool.
so use is wisely and happy trading.
its true
yes, it practically true. Try first build your own capital. Small Play, happy play.
Hi Nithin,
This questions is followup to the above statement ” You will be able to use this entire margin after haircut for taking intraday or overnight positions in Futures, and for writing Options of equities, indices, and currencies. You will not be able to use this margin to buy Options or take further positions on the equity segment.”
Situation – 100% in liquid bees, pledged. wrote options and now squaring it off (buying options) – will the system allow me?
loke4300,
Yes the system will allow you to place the order and Close your position.
Oh yes absolutely.
Hi Nithin,
I have cash of 1 lakh and Liquid bees worth 1 lakh and ICICI Bank Stock worth 1 lakh,Now i will pledge both Liquid Bees and ICICIBank stock. How do you differentiate between my pledge stock and Liquid Bees ? As you are considering Liquid Bees as cash ?
90% (after haircut) of liquid bees pledged will be added to cash balance for calculating if your account is in debit or not.
If u reduce the exposure margin.. will be very thoughtful so we get better margin. Do not increase limit but do reduce the exposure margin as it is lying in your account anyways. thanks
Exposure margin is debited by the exchange, it doesn’t lie in our account.
can we pledge bank fixed deposits / RBI t-bills / govt. securities / bonds also ?
No, not possible.
Hi nitin,
Do something good for cash segment..as in cash segment u don’t give margin for intraday n posstional base.as compare to other brokers who give good margin exposure. R u ppl doing margin for cash segment. Wil be happy if u give exposure in cash segment also.
Margin for delivery soon.
Thanks Nitin… Waiting for the same… Very eagerly
Hi Zerodha!
Have you started margin for delivery yet? I am very keen and eagerly waiting to pledge my holdings and avail extra margin for buying more stocks.
Please let me know.
Thanx.
Saroj
Hey Nithin
Are you still working on this? Shall we wait for this feature in zerodha / kite
Nithin
1. Are Govt Tax Free bonds like the ones recently issued (IRFC, Railways, Hudco etc.) eligible for margin if transferred to your DP?
2. I agree that your method of pledging for margin is more secure, but the method some other brokers use (ie. no formal transactional pledge/unpledge takes place but broker somehow provides margin against shares with POA, not sure how they do it) for margin is also desirable. E.g. I would like to churn my equities portfolio, while being free to avail margin for MIS intraday trade.
Can you tell how other brokers do it and why you don’t wish to do it that way? Maybe you can provide both methods of margin and let the customer take the call on how he wishes to avail it.
Also, being a newbie the only bees I am aware of are pesky & bothersome creatures but definitely solid, though fragile. Would you kindly throw some light on these liquid bees 😉
Thanks.
1. No.
2. Other brokers earn a significant revenue from getting people to pledge stocks and trade F&O for a % brokerage. So yeah, they in a way enforce the pledge margin on everyone and hope clients trade for brokerage. 🙂
Check this for liquid bees: http://tradingqna.com/13519/can-someone-explain-how-exactly-liquid-bees-works
I have an account in Sharekhan there no need to apply such type of pledging, when we need margin just click on stocks DP to margin & vice versa without any charge & instantly get margin,
They don’t charge for pledging because they make up in higher brokerage charges. Instant margin is something we will start in the future.
Providing instant is badly needed. Looking forward to happen the earliest.
Working on it.
Is this instant margin available now and are there any charges for it like pledging & unpledging a stock costs 60/-
2 comments:
1 – ICICI doesn’t charge anything for pledge/unpledge. Earlier they used to charge. Of course they make money by charging high brokerage.
2 – ICICI doesn’t have the 50% cash requirements, I do overnight options call writing all the time. So how are they managing it? Or they are charging and I’m not aware about it.
1. There is a cost for us to pledge, what we charge is almost as per actuals. Yeah, others do it for the higher brokerage.
2. They must be charging.
Can you please upload video of this topic.Since I am a novice trader so I am little bit confused so it will be good if you upload a video describing it.
There’s nothing to explain here through a video Dipak. It’d be better if you can call the support team and speak to them who’d be able to explain.
Hi Nithin,
Is there any interest charged on margin received through Pledging share. if yes could you please provide more details.
Also, is there any time frame or period for this ? Can i pledge today use the margin tomorrow for intraday and then unpledge day after?
Thanks,
Sathish
Sathish answers to both are mentioned in the above post.
In one of the earlier posts (http://zerodha.com/z-connect/tradezerodha/margin-requirements/zerodha-margin-policies), you had mentioned, “Unlike brokers like IIFL who keep the stocks with them when they pledge, we pledge it directly with NSCCL (NSE). So we don’t end up lending the same stock to someone else, or charge interest on margin provided.”
However, now you have started charging interest on pledged amount if the pledged amount > 50% of margin. What has changed between earlier and now to take this decision?
We are charging interest only if you use our funds for your position. Ideally we should have charged earlier for this, mistake from our side.
I do agree with AMIT NANDA , what CIRCUMSTANCES has changed for ZERODAH , to charge interest on per day basis on DEBIT , at the same TIME , one is keeping his equity pledged with zerodha / broker ,
so it is having a BLANKET for undue positions …
Sunita, you can keep liquid bees as pledge if you wish, as per the regulators we can consider it as good as cash. If we haven’t charged earlier it was our mistake.
Great Initiative Nithin.
I normally go for low risk covered call (long cash + short call). This strategy asks for simultaneous entering and exiting both cash and call. But this strategy may go haywire if unpledging the stocks takes T+1 day. Is there a solution to this?
Once the process has streamlined, we will try to give u the option to Pledge/unpledge same day.
I am thinking of opening my demat account with zerodha but before that I need to know if I can sell covered call here, because:
1) in zerodha it takes T+1
2) I am confused maybe but my shares will be squared off if I dont have additional cash to cover the lose done by the call option on daily basis ( covered call is decided after expiry, if zerodha keeps squaring off my shares then how will it work?)
Lino, guessing your query is answered in the other comment thread?!
IS THERE IS ANY TIME TO UNPLEDGE OUR STOCKS.
MEANS THAT THERE IS ANY LIMIT THAT YOU HAVE TO COMPULSORY UNPLEDGE OUR STOCKS WITHIN 5 DAYS.
OR NOT.
No time limit, you can keep it pledged for as long as you want.
Any extra charges for long time pledge?
Hi Nithin, I read on a similar post that Zerodha compulsorily unpledges the liquidbees collateral every quarter (3 months). So what is the latest rule on this? This would mean an expense of Rs 60 + taxes more than 4 times a year.
We are required to do this as per SEBI regulations. No way around it.
Lets Say i have itc 50 qty and i pledge today.. Aftr 5 days i m buying 40 more ITC shares..
Now i want to pledge the additional 40 shares.. Does it get charged again 60 rs for pledge (i already paid 60 rs for Pledging my 50 qty) ??
Yes Rs 60 extra will be charged when you do the additional 40 shares. Rs 60 is the cost for every pledge request.
Follow up on this:
So you pledged 50 shares> paid INR 60, pledged 40 > paid another INR 60. Now if I want to unpledge say just 30 shares and then after another 20 shares. So questions:
1) Can I do this in multiple lots like in example
2) Will there be any charges for it.
My situation is more to do with Liquid Bees (not shares), will there be any difference to above answers?
When you pledged 50 shares and 40 shares Rs.60 was charged each time. The charge is for both pledge and unpledge. You can unpledge it multiple times.
what are the interest rate for loan you provide?
It is as explained in the post above, if your account runs into a debit balance it is 0.05% per day for the debit amount.
Means Monthly 15%………………….OMG!!!!
:), no, it means 1.5% monthly or 18% annually.
Hello sir,
If I do only intraday in F&O , can my account run into a debit balance, in case I utilized > 50% of the balance?
Regards,
Jyoti
sir. i have some querry regarding f&o trading.
on expiry day of january series at 2.58pm , i wrote banknifty 15500pe at rs.8 12lots , i just tried to square it off at 3.00 pm but was not able again i tried at 3.01p.m. , subsquently at 3.02,3.03 i was helpless , i was not able to sell it off , it was square off automatically at 3.24pm .till then the price was quoting of 15500 pe at rs. 124 , and i lost more than 41k
i called up zerodha at 4.00 pm on the same day , they told me that exchange server was down , please explain me sir how can exchange server be down when price is fluctuating and more than 10000 crores has been traded in particular 15500peof banknifty and it is very liquid counter as we all know.
i lost my money without my fault . my confidence on zerodha has shattered .
why should i trade with zerodha in this condition when i am not able to sqaure off my positions.
sameer chandra jha
ds4876
Our servers weren’t down, there were no issues on the trading platform. Do you have a ticket number that you have raised for this when it happened?
Yes. Sometimes i too faced this. Suddenly during trading hours Kite refuses to take any order saying “Server is not available” or some error message. By the time order system comes back the price changes. I know this happens when server overloads and communication issues with Zerodha-Exchange servers etc. But clients do not expect these kind of issues during trading hours as every second is crucial. Please improve the capacity/reliability from your end as the client base grows.
I know zerodha is trying to provide best brokerage/services to clients.
Hmm.. shouldn’t happen, can you take a screenshot the next time it happens and send an email to [email protected]
my ticket no. raised is 297172 , please explain me sir in future how can i overcome this type of problem especially trading on expiry day .
If i trade on kite do i have to be cautious .
We will check and get back to you on this. It hadn’t happened for any of our other clients. Surprising that you raised the ticket only today morning for an issue that is 5 days old.
sir , that day i called up in evening on 08040402020, i got answer that since banknifty was crashed more than 1.5 percent after 3 pm within minutes so exchange was not able to decide the premium of put option and thus server went down , so just to verify by you i just raised question ,sir .
Suitable explanation in this regards has been given on the ticket. It was because of the Execution range set by the Exchanges.
It means that execution range can occur in banknifty also on the expiry date of same expiry series and too in atm contracts whose turnover was 10 k crores that day .
Oooh my god…..??
i have not start trading yet, with Zerodha, i am afraid to see your case
Check this post on execution range: http://zerodha.com/z-connect/queries/stock-and-fo-queries/deciphering-nses-execution-range-circular. It is set by exchange and not us.
Recently received a copy of general communication-circular from zerodha –
stressing that henceforth 50% Cash is required and 50% as pledged equity margins;
if cash is not there in your account , then interest component will be debited.
my point is to get certain ambiguity resolved by team zerodha.
Le us assume my own case , I have around equity of 20Lacs out of which equity worth of 12Lacs is parked,
-pledged for keeping as margin money for F & O;
( with either 70% or 80% as haircut , i should get be able to get margin
of 9.5lacs approx)
and have only 0.10 L as cash parked in account with zerodha ;
assume i have a position in equity future for far month ,
which requires margin of 0.40 L,
next day for averaging i have to take new position with margin 0.45Lacs and 0.50Lacs
totaling 0.40L + 0.45 L + 0.50 L = 1.35Lacs,
then there are M to M debit of
Rs.0.15 Lacs totalling 1.5Lacs
as i have STANDALONE margin of 9.5 Lacs ; i suppose -presume -I am safer mode to do transactions
now confusion as erupted ,
by your so circular of 50% cash is required ;or else interest will be debited
do I require to keep 0.65L as cash with zerodha ?
i suppose Not,
as i am in SAFE ZONE,
as equities of present worth 12.0Lacs IS NOT GOING to be 1.50Lacs
equivalent to margin money required ; hence No interest will be charged to me by zerodha;
please explain me in details , pros and cons and consequences,
citing above example only
as I am / (no one should-be ) NOT INCLINED to bear /pay Interest charges,
when sometimes our funds to tune of lacs of Rs. ( as a investor /trader) are parked with Zerodha(broker)where we neither opt nor given interest from zerodha (broker)
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.
Can u plz expalin the calculations of 1.35l as explained above. I am not able to get the equation as it mentioned he was having 10k in hand. Thanks in Advance!
In the question that the client has raised, he’s mentioned that he’s taken positions worth 1.35 lacs.
Why there is a need of 60 rs per scrip to pledge or unpledge with the lag of 1 working day. Other brokers are offering it for free without any instruction from client.
There is a cost involved in pledge as shares have to be moved from your demat account (DP charges). Other brokers can afford to do it for free because they will recover the charges in brokerage. Lag of 1 working day, we will look at reducing this in a couple of months.
When you choose to pledge, there’s movement of stock for which depository charges are levied. Other brokers may not charge you but their higher brokerage will include these charges.
Can I know the charges for using margin from pledged shares and charges for extra margin provided by zerodha apart from cash+collateral holdings value.
Can you go through the blogpost above, all that you need to know is mentioned there.
Its all explained in the above blog Viswa. For additional margin provided, interest @ 0.05% will be charged.
Hi,
Is there a way to track all past pledge/unpledge requests online ? Earlier there would have been an email trail. How about now ?
We are adding like a summary page today on the pledge holdings table. You will be able to see it here.
Not for now. We’re building the module. For now you’ll have to keep track.
However you’ll be able to change the date to a previous date and get the pledged holdings
I have a Mutual Fund portfolio in my CDSL demat account. It has 7 schemes, a combination of 60% Debt and 40% Equity Funds. Is it possible to pledge and do trading?
Currently MF pledging is not enabled, very soon we will. We will also share the approved list of MF that can be pledged.
MF not for now. In a few days.
Hi Venu,
As you mentioned that MF pledge will start in few days in Feb 2016. Now it is close to 2 years. still no update.
Any plan that you will be start this feature, or is it kind of in few days/weeks forever.
Regards
An eagerly waiting customer for this future..
We’ve held off on starting MF pledges until we migrate to our new backoffice, which has taken longer than expected.
Hi,
Thanks for your reply..
Any more time lines for it to get activated?
I am waiting for new back office also as I am not able to see my trends in trading as old back office is not supporting the quant also. Please provide some alternatives at least to see my trends and to analyze myslelf.
Thanks
Tirupathi
Hi,
Thanks for your reply..
Any more time lines for it to get activated?
I am waiting for new back office also as I am not able to see my trends in trading as old back office is not supporting the quant also. Please provide some alternatives at least to see my trends and to analyze myslelf.
Thanks
Tirupathi
We’re currently testing out the system. Hopefully, it should be out before the end of the quarter.
Hi,
Are you talking about the new backoffie or both new pledging option with mutual funds also?
Thanks
Tirupathi
This is NOT FAIR, not at all,
in the case , when we do not have positions in F & O;
or in case of having CREDIT positions in F & O ,
then brokers margin gets increased to THAT AMOUNT as per the same
or deposit of broker kept at SEBI gets CREDIT;
for that NEITHER IS GOING to give interest on EARNED CREDIT, nor is there provision by SEBI to brokers to DO so….
at-least ZERODHA should make a REVIEW in case of it (if at all it is mandatory)
or at most charge 0.05% per day basis when the account gets into DEBIT ;
at the same time should pass on interest of 0.04% ( discounted one )to CREDIT AMOUNT that broker is using AS BRIDGING AMOUNT between SEBI and it.
Sunita, this is a standard practice followed by every broker.
I am very much disappointed with zerodha and people of zerodha. Today I made a short in maruti future at 3970 and placed two orders, one sl order at 3991.4 and other order at 3940, high and low made at that time was 3997 and low at 3956, till 1 o clock the high made in the future was 3987.95, i also set an alert at both the prices so i was assured that whenever the price reaches near any of my order i will call zerodha and cancel the other order. I got a message stating that the price of the future is trading at 1940 and therefore the alert got triggered, i call zerodha people and there i come to know that my 3991 order got executed. this has happened twice with me and i am really upset and irritated with the explanation that even though the price is not showing in the terminal that it had reached 3991.4 but still my order got executed and i have to talk to nse. then why i am trading with zerodha? cant zerodha compensate for loss which actually never happened, can zerodha give me an explanation as what stop loss order is and whether does it have any meaning because 4 rs difference the order got executed, netiher it is showing in the terminal that the price had reached 3991. i made loss instead i would have made profit. nobody is ready to even listen and moreover, customer service sucks as their representatives are rude and ignorant.
People can call me at 7566134034, if they think I am lying, I am in profession and trade because i am passionate but havent expericend anything like this
Regards
Aditya
Aaditya, this is a common query that clients of most brokerages get. Here is the answer for that http://tradingqna.com/2492/placed-order-which-executed-price-charts-amibroker-other-chart
this is the explanation which is given every time when there is no explanation, since you have pointed out tic by tic question then I would request you to send me a snap shot of the trade which executed and also how would you explain the alert system which did not triggered whereas i had put a condition that if the price is more then 3990 alert me with sms.
Basically what you are saying is to protect your terminal fault as i had already spoken to nse people and they straight away said since I am using third party software, therefore, they are not liable for any explanation. i am a client of zerodha and I am using your terminal, when you are unable to show me that the price did not reach the executed price then I need not go any where else for explanation. I had requested you to send me the snap shot and your team is so scared to do so because they know I am right as they have already checked it. I never expected company to give such explanation which has no meaning, basically the explanation given by you clearly indicates that stop loss order has no meaning because in my case there was a difference of 3 rs but still my trade got executed without showing in the terminal. so even if i had put sl at 3995 or 3998 still you would have given me same explanation. it is a win and win situation for you since you are a big firm but trust me if you are not helping me in this you will surely not going to do good because as a company if you cannot support your client then people literally start ignoring you.
Best regards
Hey Aditya, Here is the NSE trade verification module http://www.nseindia.com/tv. You can confirm that your trade was definitely hit on the exchange.
If I transfer Liquid Bees from HDFC demat to your margin a/c , will I get the dividends credited to HDFC demat a/c or how does it work?
Thanks
Dividends will come to the broker. We will inturn transfer to you.
One of your point says that…
Exchanges stipulate that for overnight F&O positions, 50% of the margin needs to compulsorily come in cash and the remaining 50% can be in terms of collateral margin. If you don’t have enough cash, your account will be in debit balance and there will be an interest charge of 0.05% per day applicable on the debit amount. So assume you take positions that require a margin of Rs 1 lakh, you will need at least Rs 50,000 in cash irrespective of how much collateral margin you have. Assuming you don’t have this Rs 50,000, whatever you are short by will be the debit balance for the day, and interest will be applicable for that amount.
I have one query….
I have pledge my equity and got Rs. 50000 after haircut… now I want to sell Option Call worth Rs. 50000… in this case do I need to have Rs. 25000 as cash balance in my account?
Yes.
SIr,
I have a question. Whether this additional margin is available for commodity trading??
If not, is there any upcoming product in Zerodha to increase commodity trading margin!!
Thanks in advance..
Not for Commodity yet.
SEBI doesn’t allow for this to happen.
Hi
I opened a account recently and I am not getting any support how to setup my account and trade
I just received email and so much confused on setups
Venkat
Your Sales manager will call you tomorrow and give you a demo.
Hi Nitin,
My client ID is RS4799. I realised that while calculating the interest on margin used, your system is not considering pledged liquid BEES as cash equivalent. I raised a ticket for this for couple of times but support people is not understanding this. In fact I explained this to couple of persons over phone call as well, but got very poor response. Please let me know how to handle this. Due to this I have closed my positions.
ticket number 229435
I know this is not the forum to discuss this but as I am not getting proper response, I am helpless.
Will check and have someone call you and help you with this.
So,you’ll be charging interest on negative cash balance + the margins you have provided me?
If i close the position in loss resulting in negative cash bal. Still the interest be charged on the balance Till when?I mean when will you sell the pledged shares?
Sorry i have never used f&o.
Thanks
If you exit your positions, there is no margin utilized, so no interest will be applicable.
Dear Nithin,
At the time of opening the trading cum Demat account i have specifically asked your sales person whether I will charged any interest or not for utilizing my own margin, at that time i received a answer that no any interest will be chargeable. Now all of the sudden Zerodha is talking of charging interest on the negative balance / cash shortfall. this was not the case with IL & FS demat account whcih my friends are using.
Interest will be a huge cost for small traders like me.
Mehul, there’s no interest if you’re using your own funds for trading. Its only logical that interest be levied if you’re using others funds for your own trading.
Sir,
Whether, we can use collateral margin for Equity – Delivery or Equity – Intraday??
No.
Sir,
I am new for trade. pls what is mean for ‘Liquid bees’?
http://tradingqna.com/533/what-are-liquid-bees
Are liquid mutual funds and liquid bees are same? If I pledge Axis Liquid Mutual Fund units then will it be treated as cash equivalent same as liquid bees?
Yes.
Sir, Can we use 100% collateral margin for intraday to trade F&O?
I understand from pledging that if i have 90k as a collateral mrgn. I can use this full value for trading intraday only.
And to trade overnight i need to have 50% (45k) incash.
Please clarify.
Yep, correct.
Interest is charged on “overnight” debit balance only right?
As I understand, there are no charges for using collateral margin for intraday transactions (with no cash in hand), right? Also, what if I incur loss of 10k and my cash balance goes in negative (-10k), interest will be charged on negative cash balance (-10k) or pledged stocks/liquid funds will be sold?
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.
Any news on Android app?
Did u see this: https://www.youtube.com/watch?v=6G7MrqY7rFs. We will be out with the beta hopefully next week.
Hi,
If i sell stock today, do you include the amount as cash balance for today or only after T+2 ?
We’re including it as cash balance for now.
In that case, I have been erroneously charged interest. I had sold stock to more than cover my debit balance. On that same day, I was charged interest on my debit balance. Can you pls ask someone to investigate the same (client id DS4670)
Best if you can send all account specific queries/issues to [email protected]
Stupid question – I have 100 Liquid bees that I pledge and use for various F&O transactions. At the end of every month, I am supposed to get the dividend back as more Liquid Bees units. Does my pledging impact this credit of new units to my accounts? Would they get credited as ‘unpledged’ units?
Yes, dividends gets added to unpledged units.
HI
suppose i have liquidbee of 1 lack, and i pledged and use collateral margin for trading FNO for one year.
in that case after one year i ll get dividend on liquidbee or not.
if i get dividend how and when i will get.
This mean i can use my money to get dividend on liquidbee and on same time i can use that money for trading FNO.
what type of skills required to be a trader and how to know i become a good trader?
I want to pledge some of my shares and used that margin to buy more shares for delivery. Will just an option be available later on? Is it even possible based on sebi rules?
No SEBI doesn’t allow this.
Thank you for the information.
I am quite fed up trying to pledge shares since yesterday. If I try on a PC, it doesnt give me any message…it just refreshes the page and nothing happens post that. No error message. Surprising, on Mobile, it atleast give me an error message. It says ‘Pledge option available after EOD process. Please try after 8:30 pm’…best is that I was anyway trying after 8:30 pm. Even today it is not working. Can you justify why it give error message on mobile but not on PC!!! Secondly, the most important why am I not able to pledge…Lastly, tried making atleast 10 calls in last one hour (after 10 am) but either the tape of ‘we are closed right now’ !!!(Even after 10 am) is run or nobody answers the call for more that 5-7 mins so I hang up…Its very frustrating to not get support when you need it the most!!
Dear Mr. Nithin
I have joined as a member of ZERODHA AUTHORIZED PERSON recently. My quire is: I already have four referrals under me who had opened account under me with Zerodha before I become a Zerodha AP, will these four client comes under my zerodha AP ID, and will I have the earnings benefits from these four referrals as a zerodha AP?
Yes, you will.
50% pledge rule does not apply to liquid bees. What liquid bees mean. Does it mean bankbees n NIFTY bees
Check this http://tradingqna.com/533/what-are-liquid-bees
This link doesn’t work.
Is it necessary to disclose details of other trading and demat accounts that one may have?
Suppose I have demat account only as a 2nd account holder and now I wish to open a trading and demat account with Zerodha? Would it be necessary to specify the details of the earlier account where the primary account holder is someone else?
No, not necessary to disclose.
Thanks Nithin for the Post.
I have a doubt regarding the below statement in your post:
“Do note that if you start running trading losses on F&O using collateral margin, and don’t provide the requisite marked to market (MTM) additional capital, we will have the right to square off your pledged holdings to make up for the losses.”
Can the additional capital (in case of losses) be in the form of excess collateral margin or should it be only on free cash? Assume that I am Pledging LIQUIDBEES.
Any losses will have to be in form of cash itself, exchanges won’t accept liquid bees for any MTM losses.
What is the haircut for pledging sks microfinance as I am getting 15% haircut against 40%. Is the haircut floating up to the maximum of limit like 40%?
Haircut on SKS is 40%, check this list https://docs.google.com/spreadsheets/d/1vRI4NKpJ-3mnOWxUhSRMSQD5txy8QNumzSQrdfGKyL0/edit#gid=0. It has to be cutting 40%, will have someone check why it is not.
I see 404 error when I try to download account opening docs from Zerodha site. Can someone help me?
hai.. my query is whether can we use pledging for option & equity trading/apart from future segment?
what is the time limit?
You can use it only for options shorting and futures trading. No option buying or equity trading. It takes 1 working day for the margin to be given.
Hi Nithin/Venu,
Please clarify me on this. I am going to use the margin for intraday equity trading.
Interest will be applicable on the amount received after pledging the shares?
Thanks,
Shivakumar
sorry nithin/venu,
Some one would have asked this question in this forum but i did not get any clarification on my doubt so i am posting my question to you guys. sorry if you have to answer again.
a)What ever the amount we receive after the pledging the shares, will there be any interest on that amount? Irrespective whether i use it or not?
b)also i am planning to use for intraday equity trading from that amount. Is it allowed?
Thanks,
Shivakumar
It is explained on the post above right, about when interest charges will be applicable. Check this http://tradingqna.com/29334/pledge-stocks-margin-trade-will-interest-charge-calculated.
That margin is ideally not supposed to be used for intraday equity trading.
Interest will be applicable only when you utilize margin for holding F&O positions overnight when you don’t have atleast 50% of the margin in cash. Check the blogpost above.
thanks nithin for the information
Suppose by pledging shares today I get a margin of 10,000/-
If today with the margin i take instant CNC delivery of shares worth 9000/- and on T+2 settlement day I transfer 9000/- to my trading a/c.
Will there be any charges applicable?
I try the above strategy with other brokers providing instant margin for shares lying in demat a/c.
You can’t use the margin from pledged shares to buy more shares. This is meant for trading F&O
Say i pledge 100 qty of Reliance, then after a month another 50 qty & then another 25 qty. And finally unpledge entire quantity at once, how much is cost applicable in this case?
Rs 60 x 3 = Rs 180 , it will be considered as 3 pledge requests.
Thanks for the response.
Hi Team,
I saw above that you mentioned that Zerodha will be soon providing this pledging/margin facility for positional/intraday cash market trades.
Just wanted to get more sense on the timing – is it like couple of weeks/months away or end of CY16 types?
Your input would help us plan more efficiently.
Thanks
Pledging/margin facility for cash market trades is possible only through the margin funding/loan against shares route which requires us to be an NBFC. We are working on it, but might take time.
Dear Nithin,
If I have pledged 100 EQ Reliance, and today Monday I want to sale in Nse, so I have to unpledged before 2 PM so that the next day it will submitted to nse, am I right ? Or it would be short delivery ?
To ensure that this short selling issue doesn’t happen, we will let you sell shares only once it is unpledged. So you unpledge today, and can sell from tomorrow.
Thanks for Reply, but if I dont have much F&O position and surplus cash in my account, and observing good rate for sale today for Reliance , than why I have to wait for next day ?? Zerodha may un-pledged and submit the delivery of Share.
We are currently not allowing it, but we will soon.
Hi,
Is the MF platform live now ? When I try to login, I get a message saying that its live for only Zerodha demat account holders…. What about the ILFS ones ?
It will be available only to clients who are holding Zerodha demat account to begin with. We’ll provide it for ILFS holders in the coming days.
Any timeline for the same ? If I am interested in the MF platform, should I shift to Zerodha demat ?
Yeah you could, login to https://q.zerodha.com/user/profile/, your pre-filled demat form available, print it and courier to us to get started.
Currently it is live only for Zerodha demat account holders, the ILFS integration will take a few more days.
Dear Sir,
Any product available in NSE which has 80CC Tax benefit and we can pledge also for F&O trading margin ?
Nothing as of now.
Hi,
Suppose I have 50k as cash and 30k of shares which are pledged to give 20k margin. Now if I make a loss of 1k on intraday basis, how it’s going to be settled end of the day? Will it be deducted from my free 50k cash or some of my pledged shares will be automatically sold?
1k is your MTM loss and all losses are settled from cash balance.
1) while opening the a/c. say i am mapping my current demat a/c. ( with sharekhan) at your end, Then is it necessary for me to transfer shares in your pool a/c. before selling ?
2) in case if i open demat a/c. with you then what is your AMC ? Incoming is free but then what are your outgoing chgs ? what are your demat chgs for transferring shares in my a/c. in case of different DP.
3)In cash mkt at the time of purchasing my intention is for intraday trading but later on if i decide during the day that i will take delivery then is it possible to change trade type ? provided credit is there in my a/c. for such conversion.
4) Instant credit of margin is must as that facelity is provided by almost every broker and it saves pledge /unpledge chgs as some body has mentioned above.
1. If you map Sharekhan demat, you will have to sell it through them itself.
2. AMC is Rs 300 and DP charges are a flat Rs 13.5
3. Yes possible.
4. Instant credit from pledging shares not possible for now. You will have to put a request and then the margin is release next day. Other brokers put up their working capital as they also tend to make much higher brokerage.
one thing more can we have demo of your pi software for a weak at least
There is no demo account as such we offer.
Hello I am new to Zerodha and have a question on PI..
How do I apply Average True Range and ATR Bands and ATR Trailing stop “study” on charting window of PI?
Regards
Pavan
I have pledged my holdings and availing margin for trading in futures and writing option. Can I buy bees and pledged to you instead of cash margin. Please guide me how to do it .
Yes you can pledge bees, but it is best to keep some cash in the account always to meet any MTM losses.
I have 45K in cash and enter an open option position (Put option) on 7 March, margin being 35K approx.
I pledged shares on 8 March, and received the margin on 8th March. Now I have 48K as collateral and 10K in cash.
Will the cash requirement of 50% get merged with my old position created on 7th March in case I create a new short position, our I will require additional cash for my new position?
Yes it will get merged.
Nitin, Can you clarify in case of stock pledge for option writing, can the remaining 50% cash margin come from pledge of liquid bees pledge (since they are considered cash equivalent) or it has to come from cash lying in trading account only. e.g. i need 100k margin to write an option, i have 50k margin from stock pledge after hair cut and 50k margin from liquid bees pledge after hair cut. Is this sufficient or I have to have 50k in cash.
It can come from liquid bees pledge. But make sure to keep some cash to cover if there are any M2M losses.
Thank you Nitin for the clarification.
If i have 1 lac Equity colleteral, 1 lac liquid collateral and no cash. I sell 1 put requiring 1.25 lac margin and got 10000 as premium. Next day, if my position show unrealized loss of 15000, will i face cash or margin shortfall? Will i get margin call?
I am asking this because today I am seeing on kite app that unrealized loss during trading hour is being blocked from available cashas margin, though i have more than enough liquid (cash equivalents) collaterals.
Hey Jignesh, since you’re having sufficient margins (Equity Collateral + Liquid Collateral), there will be no shortfall and you will not receive any margin call. However, any losses will be debited from the cash balance, liquid fund collateral cannot be used towards paying losses or charges. If you do not have cash in your account, your account will result in a debit balance, on which interest will be applicable at 0.05% per day. You can learn more here.
Any plans to increase MIS margin for stocks(especially highly liquid stocks).
RKSV is offering 15x on almost all the liquid scrips.
I feel 11x is low that too on few ones. However, I love Pi and other services of Zerodha
You can use BO/CO order types to get more leverage for Intraday trading. You get 20X leverage for liquid stocks. Here’s the link to the BO/CO margin calculator: https://zerodha.com/margin-calculator/BracketCover/
My trading style is different. I don’t use stops and so I have never used BO/CO orders
If I pledge the stocks, will it consider as long term capital gain?
Yes, it will be considered as long term, as you continue to hold the share.
Nithin, In the post you say that “You will continue to get benefits of all corporate actions like dividends, splits, bonuses, etc. on the stocks you have pledged.”. So, will I get the dividend directly in my linked bank account as I do with unpledged shares, or will it be held with the broker (zerodha) and reflect in my zerodha account balance. Thanks
It will be credited to your bank account.
Thanks.
In fact, that has not happened. I pledged 75 Heromoto and did not receive the dividend on those shares, while I received dividend on the unpledged 15 Heromoto that I also held. It seems like there is a gap between what is written here and what is actually happening at Zerodha. I raised a ticket #290786 with Zerodha support yesterday , and am yet to hear back from them.
The dividend gets credited to our account, and we in turn credit to your bank account. This might take an extra few days. Having this checked.
Saikat, we can credit the dividend to your account once we receive it to our account. We reconcile dividends on a weekly basis and make payouts in case you’ve pledged stocks with us. Note that as per Exchange regulations, we are to pay dividends within 30 days of having received them and we’re doing this well within this time. Your dividend has been credited to your ledger account. Do not worry, the best industry practices are followed at Zerodha.
Good. Transparency and clear communication are also best practices, so if you had made this clear first up, I would not have had to raise the ticket or ask the question. Live and learn.
With that said, I must add that you guys are doing a better job that other trading platforms I use/have used, so congratulations.
Why has the practice changed from crediting the bank account to crediting the ledger ?
Hello Nithin,
Thanks for introduced zerodha. I was thinking to stop trading due to heavy Brokerages that I paid in past to other brokers.
It seems few facilities are yet to add with Zerodha. It is possible to set value for buy & sell with other brokers – can’t we make that options possible with Zerodha? Eg. A trader planning to buy ICICI shares once it reach 230 etc….
Currently that facility is missing with Zerodha. Please do needful. Lots of my friends are interested to move to Zerodha.but these small concerns are pulling them back.
Please advise.
Regards,
Sreekumar
Yep, valid till cancel orders is on our list of things to do.
Why is the ledger balance not showing after 31st March ?
Some year end issues, should have been fixed by eod.
When would MF pledging be starting?
Should MFs be in DEMAT format for pledging?
Does Zerodha MF platform offer a way to buy MFs in DEMAT form for the ease of pleding?
If I map my existing demat account to zerodha, can I pledge shares from that Demat account? Or for pledging, I need to open a new demat account with Zerodha?
Thanks
You’ll have to open an account with Zerodha with Poa conferred to Zerodha to be able to pledge stocks.
my id is DS8948, plz clear my query -is Pledging is 100% safe(means there are no worry about pledged share)
No, the pledged shares are completely safe. The only thing you’ll have to ensure is that if there’s any debit that arises out of the trades that you’ve made using the pledged stocks, is cleared failing which the broker may sell stock to recover the debit.
Hii……..TM Zerodha ,just now i opened my account with zerodha but not yet received my id and password.
I have encourage all my colleagues also to leave there current broker n come with zerodha but they r hesitating due to no exposure on cash segment…..so kindly look after it it willl be a great boost for small retail traders.
Yes, we’re working on providing margin trading on the Equity segment. This product should be rolled out in the coming months.
Please start margin lending for equity delivery.
We’ll let you know when we start.
Appreciating all the things. Pls. provide or consider also sbi N- series Bond as collateral margin as it gives 9.5% return.
Thank you.
Rushi, with corporate bonds which are illiquid, taking as collateral may not be very useful.
Bonds are illiquid, and taking them as collateral may not really be of use in extreme conditions.
Sir
When will you start Margin Funding for Equity – CNC ?
Awaiting Eagerly…
Working on it.
Are you waiting for some kind approval from Sebi/Govt./ RBI, and once you get that you will start margin lending? Or, is it some technical issues, without resolving that you can not start? I am asking because you have been working on it for quite some time, I am not changing my broker on the hope you will start it soon.
The margin lending bit for delivery based trades is a grey area. Especially the bit where the broker is not a NBFC. We want complete clarity before we do anything on this.
Dear Nitin
Would like to transfer FD to liquidbees and wish to know pro and cons of the same.
I need support from hyderabad to familiar with zerodha trading platform in F&O and executing the orders as I wish to invest huge hard earned money.
Liquid bees are easier to liquidate unlike FD’s which come with a lock-in. Additionally the dividends you receive from investing in Liquid bees are tax free unlike interest from FD which is subject to tax.
You can get in touch with Mr.Reddy from our Hyderabad office who will be glad to assist you.
Would request to upload all sort of videos at youtube which may help to learn in operating the platform for beginners like us. The lack of knowledge and support keeping away from market by loyal customer. I tried earlier with support but not satisfied . Would appreciate to provide competent person as hard earned money is going to invest.
Not everything can be explained through Videos. We’re probably the only broker in India who emphasize on the importance of spreading knowledge. A few of our initiatives in this regards are:
Zerodha Varsity: http://zerodha.com/varsity/
Z-Connect: http://zerodha.com/z-connect/
Tradingqna.com: http://tradingqna.com/
Zerodha , congratulation for your all effort.Your Explanations are awesome. I have one question.
Can I Pledge and unpledge in the same day same day?
Thanks
Pius, same day won’t be possible. Turn around for both pledge and unpledge is 1 day.
As you said that you would be soon start accepting MF for cash collateral margin. So what would be the process for the same. Like for eg. I have the short position in some option contract and would be required atleast 50% in form of cash margin. At the same time I have the Liquid mutual fund in my name purchased directly from the Mutual Fund Website (without distributor). In such a situation what would be the process form me to pledge my Liquid MF in favour of Zerodha to cover my cash margin requirement?
Vipul, we will need mutual funds in demat form bought through us for pledging (we are still no accepting MF for pledging). I’d say the easiest way would be to just buy the liquidbees ETF trading on the exchange. Works similar to liquid bought in direct mode (since we don’t charge brokerage).
i have pledged shares in zerodha and i have the amount of that shares reflecting in my account. tell me can i take a pay out of the shares pledged amount to my bank account ?
My id is DR0612
Want to know whether I can use funds I get thro’ pledge for MIS .
Yes you can.
Why we cannot use the margin for buying options.? If possible please provide this feature as well.
Exchanges don’t allow this.
I pledge shares of Rs. 1.00 lac and gets a margin say rs. 80000.00 . I have Rs. 2.00 Lacs as cash margin.
Now I use Rs. 2.50 lacs margin F&O and close the position before the closing of market. Will you charge the interest on rs. 50000.00 or if i carry forward the position for overnight only than you will debit the interest?
Pl. clarify.
No interest will be charged. Interest will be charged only if you buy something for Rs 4 lks and keep it to the next day.
O K , Thanks a lot
Nithin,
I would like to earn interest for the margin I am paying in FNO. What ways can I achieve in Zerodha?
I knew that NSE accepts FD collateral as margin. I also heard that third part FD or Bank Fixed Deposit Receipts can be given as collateral for my margin requirements and it can be used as 100% cash as well.
https://www.nseindia.com/products/content/derivatives/equities/liquid_assets.htm
Is it true? Is it possible with Zerodha? Liquid Bees is the only way to earn interest?
Any plan for margin funding?
Thanks
Jegan
For now, we support only liquid bees. Margin funding on our list of things to do, might take some more time.
Hi Nithin,
Appreciate if you can let me know, if Zerodha now accepts Collateral Fixed Deposit to provide Margin. I do lot of Option writing & would like to earn interest on FD.
If NSE has the Process then we should get this feature. Thanks for looking into this.
Hmmm… Maybe in the future.
Do you offer Collateral on Mutual or Liquid fund for now?
Not yet Kishore. This will take some more time.
Hi Matti, Thank You for the response.
Can you please share the date otherwise I have to move my entire capital to another broker as they are providing collateral on Liquid fund.
Hi Nithin, I have done collateral with Reliance Liquid bees. Can you please let me know, how dividend/Interest would be paid to me as I am not seeing any price change or credit to my account from last 20 days. Would look forward for your response.
Can you please update on above?
Sir, I have pledged sbi stock, recently sbi announced dividend but I have not received dividend in my sb account..
We credit dividends within 7 days of having received it in our account.
I have few questions hope to receive quick response which will help me to open account in Zeroadha
1) Why do you say “◦Exchanges stipulate that for overnight F&O positions, 50% of the margin needs to compulsorily come in cash and the remaining 50% can be in terms of collateral margin” – This is not true I am having Trading account with one big Securities (Brokerage) Firm & they provide complete collateral Margin for all types of trading except for delivery which is always in cash. Is this 50% rule still VALID?
2) You Said “◦You will be able to use this entire margin after haircut for taking intraday or overnight positions in Futures, and for writing Options of equities, indices, and currencies. You will not be able to use this margin to buy Options or take further positions on the equity segment” What do you mean writing Options ?
Do you mean we can buy a Call or Put and only Sell a Call or Put ? Please clarify
Hi Paresh,
1. Yes this 50% cash rule is still valid. If a brokerage is allowing you to take F&O positions overnight, there has to be 50% of that margin in cash. For intraday, even we dont’ ask for any cash margins as such.
2. Margin from collateral can be used only as margin, so yes only for trading futures and shorting options. In case of option buying there is no margin blocked, so yes you need to have cash in your account.
These rules are set by SEBI, so ideally no broker should be breaking them.
Thanks for the quick Reply Nithin.
This is a surprise to me, infact my broker does not have any this kind of restriction.
100% collateral can be used for any type of trading (overnight as well ) except delivery based trading of equity (cash).
If possible, Can you share the SEBI url which states this rule (I am asking too much 🙂 but it will help me to understand)
Check this. If you google for some of the keywords on this, you will see more.
Hi,
Is the 50% rule for cash/collateral valid even if the collateral is in the form of liquid Bees ?
Hi.
As mentioned in the post above, liquid bees are considered as cash equivalent and the 50% rule does not apply.
You skipped my query..
Missed, have replied.
I am newbie in zerodha. but I have past experience in other brooking farm. My queries / suggestion to upcoming zerodha as below.
1. Though ZERODHA forecast as low brooking farm, so it is need to reduces price for pledging/unpledging . It should be Free or Rs. 10 to 20 irrespective of quantity .
2. It takes lot of time nearly one day to reflect margin. It should be within one hrs or less though pledge/unpledge is chargeable .
3. Pledge/unpladge charge not deduct at the time of pledge. It should deduct separately when pledge and when unpledge if applicable.
4. It is not required manually unpledging the stock if seller want to sale the stock. When seller wants to sale pledged stock, Pi or kite give options to unpledge and sale instantly. unpledge charge then deducted if applicable.
I agree charges should be 0 for Pledging and unpledging like other brokerage firm and it should be instant and we should be able to spot sell the pledged shares.
1. The charges charged for pledging are a cost to us. The shares move from your account to our account and inturn to the account of ILFS with whom we’ve partnered to provide you margins. So we only collect transaction charges on such movement, we don’t make any money here.
2. You have time until 4’o clock to pledge shares to get margins for the next day.
3. If shares are pledged, then they’ll definitely be unpledged. The fee is a nominal sum of Rs.60/- which includes service tax. You should know that we haven’t increased this despite the recent increase in Service taxes.
4. We are working on providing this facility, it requires some integration. We’ll let you know once it’s done.
Thanks for reply.
Its need immediate effect in kite or Pi to minimizes the pledge time, (that is one day before 4’o clock) market is in volatile when opportunity comes no ones can say, so low capital traders need immediate money or margin to purchase future or eq ( intraday ). so wait for new version of Pi where we get instantly margin money after pledge.
Hi,
Are the ITM Put options always cash settled?
I had shorted a May SBI 200 PE and was expecting a the stock assignment at the expiry, but instead the position was squared off.
I had enough cash in my account to cover the stock assignment(after the margin amount is reversed).
I had 3,99,982 in Funds and 31,744 in Margin when the position was squared off. The stock assignment requires 4,00,000.
Could you please let me know why the stock was not assigned to me?
Zerodha Support gave the clarification as ” your position was squared off by exchange itself,”, which i don’t understand why.
Thanks
Satya
Satya, all options in India are cash settled. So no actual delivery of underlying happens at the end of expiry. All contracts are settled based on the closing of the underlying. Suggest you to read the options module here: http://zerodha.com/varsity/
suppose i have RS6 lac worth of shares of dlf after pledging the stock i got RS5 lac as collateral margin, next day i bought futures worth of RS4.5 lac on 1st trading day of month left with RS50K in my account can i hold it till expiry.
i always use to trade or invest in eq cash segment ”F&O and collateral margin” both is new for me.
Yes, you can hold it till expiry but you ought to have sufficient cash to cover the Mark to Market (MTM) losses.
Nitin, today I have tried to buy NTPC shares in cash to trade intraday by using Bracket Order. But the order was not executed bcz of not having enough margin. After seen the rejected msg I understood that you are giving 3× times leverage in this bracket order. However, in your previous posts u have said that we can get leverage of 20× times by using Bracket order. So why I am not getting 20× times leverage even when using Bracket order that too for NTPC which is front line stock. This is my first trade in Zerodha. Plz explain me how can I get 20× times leverage intraday by using bracket order.
You do get around 20X leverage for stocks like NTPC. https://zerodha.com/margin-calculator/BracketCover/ you can check the leverage for various stocks. It would be best to call the support team on 080-40402020 and get it clarified when the order fails. It could be with the way you’re placing the order.
I have pledged 2000 shares of SBIN, when can I expect the dividend for those? As I have another 500 shares and for those the amount is already credited to my bank account
Dividends are reconciled on a weekly basis and paid out. You should receive credit to your trading ledger by eod.
Hi Nitin,
I just do investment in Equity. Never done Intra day. I have the following questions which require answers –
1.Can i sell the Equities ,CNC Buy , on the same day?
2. When the margin will be added to my account? If on same day ,is it including the profit if any?
3. what are the brokerage charges in this case?
Thanks
1. Yes
2. Immediately, profits added next day.
3. Rs 20/executed order or 0.01% whichever is lower
Hi Nitin
I have to transfer all the scripts in my portfolio to one of my family member’s account , that is also in Zerodha.
Could you please let me know –
1. How much time it’s gonna take?
2.Does the receiver require to pay any tax
3. Are there any transfer charges
4. I have most of the stocks with 250+ days age. Once I transfer them to another account , will the stock age get reset to 0 as the ownership changes??
I require this transfer to happen ASAP. So I request your valuable help in this re. Is there any way to make this faster?
I dropped an email to you as well. If you answer through either of this would be great.
Thanks
answered here: http://tradingqna.com/41231/transfer-shares-account-members-account-shares-transferred
Dear Nithin
My user id: DT0234
I have 1500 GAIL shares. I also have 3lac worth of liquid bees pledged.
I want to use the proceeds from the pledge to sell GAIL options. (covered call strategy)
I have kept nearly 50K in trading a/c for the MTM.
1. I’m noticing that q.zerodha.com is showing equity cash balance of -28K. Not sure why this is so ? Not able to get satisfactory answer from support.
2. Pledged amount can be totally used as for selling GAIL options (initial margin + exposure margin). Is this correct?
thanks
Tarak
50% of the margin required to short options, need to be brought in cash. I am guessing that’s why. Can u send an email to [email protected] and keep [email protected] in cc, with your client ID. Someone will get back.
Dear Nitin
Thanks for providing such interactive platform. Recently I was on SBI Smart. No one was asking questions there because no one was there to answer. Now we have got you and Venu, so everyone have got issues 🙂
A crude question: 50% Cash (minimum) + 50% Collateral (maximum) is required to have 100% margin. On debit balance, I would be levied 18% p.a. There is no defined upper limit of Cash (obviously 🙂 100%). Say I am going for 100% cash or any combination of cash-collateral, how at max much I can borrow from you?
Deepak, there is no max :).
Hi
I have a Zerodha account for some time but was not active. I have started taking notice of you guys and it seems you are doing a fabulous job. Thank you for all the information and transparency.
I recently bought some shares of Adlabs and Mahanagar Gas (they are still in T1 period). I can see the shares in Q but the pledge button is not active. Will the pledge button become active only when the shares come to my demat account?
Thanks
Yes Gaurav, need to wait for it to reach demat.
Thank you so much Nithin. It is working. One general feedback, though. You might want to change the font in the Q section to something more readable. Although, I understand minimalist design is in these days, but the font that you are using currently, does not give a good contrast.
As a readability test, do try to get someone who does not have a 6/6 vision try to read. At times, stuff as basic as digits can be confusing (imagine confusing digits in your trade!). Try an experiment with the digit 8. Increasing the font or increasing the contrast also does not help.
Thanks for the great work otherwise!
Hi
1. can you enable pledging and unpledging of equity immediately like ICICI direct. It takes one day for pledging and one day for unpledging. Is it possible for you or not. It makes lot of time delay.
2. When you probably enable mutual fund pledging. Any specific date?
1. We are working on making this happen.
2. Will take some time.
Can mutual fund be pledged, what other investments can be pledged for margin?
regards
No, not for now. You can pledge shares/ETF’s.
“We will soon start accepting mutual funds also to provide collateral margin.”
Started accepting ?
No, some operational issues. It will take more time.
sir,
when you will start allowing to pledge mutual funds units ?
There are operational issues with accepting MF’s as collaterals. I’m afraid, it’ll take longer.
DEAR SIR/MADAM
I recently opened a trading account with you and enjoying your good brokerage plans. Previously, i traded in some other firm. They give very good intraday margin
but very high brokerage. Even by depositing just Rs.1000/-, enable us to trade in one lot of banknifty future. But they squareoff our position, if our loss exceeds 80% of our capital, remaining portion for brokerage and other charges. Now, what i want to say is, please provide some more extra margins to trade intraday, but you can also squreoff automatically our positions, if our loss exceeds 80% of our capital..
by doing this, there is no problem to you, beside this with your attractive brokerage plans, this seems to be very attractive.
while Doing pledging , for some equities -mostly from either A or B group ( assume it to be >Rs15000), q.zerodha , accepts pledging , after clicking , for some it does not ,( from page 2 onwards from HOLDINGS) why so?
Can u send this directly to [email protected] with your client ID.
Please have the names of stock and the hair cut on them that are eligible for stock pledging some where on your website.
It is available on our downloads page. Check this, called collateral.
Is it neccesary that we take position in FNO as soon as we pledge the stock or a position can be taken at a later date say after 4-5 days after stock pledging?
You can pledge and take position whenever you want. No compulsions.
Sir I have pledged 330 shares and got collateral margin of 4.5 lakhs and now i am running losses and booked loss and now collateral balance is 2.5 lakhs,when you will start selling my shares or you will still zero and then sell all shares.
Best to send email to [email protected] for individual account specific queries.
I have been holding shares of few companies for more than 2 years and plan to hold for few more years. There is significant unbooked long term gain. I plan to enter options trading now and heard good about Zerodha. I plan to pledge my shares for using it as Margin required for options trading. Can you clarify about implications on long term capital gains after shares have been pledged when I actually sell these shares after few years
There is no implications on long term capital gains by pledging stocks. But this collateral margin can’t be used for buying options, it can be used only for shorting options. Buying requires premium, shorting requires margin.
Hi,
Lets say I pledge Rs. 1L and receive 90k as margin. Now what happens when pledged share value goes down to -50% in upcoming days.
1. Will you readjust the margin and make it 45k?
2. If yes then what is the frequency of readjustment?
3. Do you provide additional margin(in proportion to 90% of pledged shared) if share value rises after pledging?
The margins are adjusted on a daily basis. The pledge margin varies with the price of the stock, if the price of the stock increases, you get additional margins, if it reduces your margins reduce proportionately. I believe, I’ve answered all 3 of your queries.
Is there any brokerage charged on deliverable position on Liquid Bees?
No
But my statement today had brokerage charged sir, on 10 aug, 2016, client ID : DH0824
We are not allowed by regulations to offer completely free, so you will see a flat 1 paisa or Rs 0.01 for every executed order. If you are seeing more than that, can you send an email to [email protected]
Sure thing thank you
Hi,
CAn we Pledge Our MF Holdings also As similar to Shares..
If So Please give more details about Minum Amount of Holdings value to create pledge, Charges for pledge etc..
No minimum amount, cost of pledge + unpledge for every scrip is Rs 60
Dear Nitin,
Where can i see the List of MF Which can be used as Pledge
Please Do let me know
Currently we don’t allow pledging of MF
Dear Sir
My id is RD2640. I purchased 700 shares of SBI on 9th Aug. 2016. Still today I am not able to see any link for pledge under my SBI shares in T1 T2 Holdings in Holdings page. I am not able to pledge the shares. Please guide.
Deepak, shares bought on 9th will hit your demat only on 11th evening. So from today evening you will get the option to pledge.
1. Does one need to have a DP account with you for pledging the shares, or we can transfer the shares sought to be pledged in your designated account?
2. If the shares are sold, do they need to be de-pledged manually by the user, or is the same done automatically at your end? Also any charges for de-pledging?
3. You have mentioned that the amount of Rs 60 charged by you is towards the costs recovered for demat transfers etc, But if we use our own demat account ( one which is not opened with zerodha), would the charges still remain the same.
4. Instead of Liquidbees, if we wish to open a fixed depsoit as required towards cash margin, is it possible with zerodha?
1. You need to have a DP with us.
2. For now you have to first depledge and then sell it. Cost of pledge + unpledge is Rs 60 per scrip.
3. Only zerodha demat allowed.
4. Not possiible
1. Why is there the requirement to have your DP only? All other brokers allow stocks to be transferred to their pool account/ margin account from where it may be pledged for margin.
2. Also having a DP mandatorily means that if I have a third party DP, say a DP with any bank, I cannot even sell the shares on your platform. Is this is what is meant by you?
1. Operationally easier for us. Also, we as a broker never keep any stocks in pool for more than a day.
2. Yes, you will be able to only buy with us if you have other DP mapped.
I am already a zerodha account holder I am asking that if a holding a stock with demat as well as in t1.if I pledge the stock the all the quantity pleadge or only demat holdings are pleadge. another question after the pledging the stock if I average it by buying some more quantity then it added with the pledge stock I mean the buy price is average or not. Again after pleging with matgin can I play intraday equity
When you pledge, you can only pledge what is in your demat holdings, not T1. Yes Buy price is average. No intraday equity, only F&O trading
When do we see the credit of Liquidbees units that we are supposed to receive on our liquidbees holdings that is pledged.
For example if I have pledged 1000 Liquidbees more than 30 days ago. when does the credit reflect un my free holdings in demat?
Regards
Shiva
Liquidbees dividends are paid out once a month. They’re transferred to your demat account. GS normally pays out these dividends once in 28 days.
Hi Nithin,
Greetings of the day!
Just one question plz.
Suppose I hold shares (XYZ Ltd.) worth 1 lac in Demat A/c and I have placed a pledge request. Lets say tomorrow, after receving the collateral benefits, the stock (XYZ Ltd.) value got appreciated by 10 points.
Q. Will my shares value (In Demat) also gets appreciated with the same amount and the collateral margin also gets updated/revised with the same percentage (after hair cut)?
Yes share value will appreciate and hence collateral value as well, but all end of day.
If I pledge Rs. 1 lakh worth of Liquid Bees and Rs. 1 lakh worth of other securities (having haircut 50%), margin available would be Rs. 90,000 plus Rs. 50,000 respectively, so total of Rs. 1,40,000. Out of this, say the actual margin utilised amount is Rs. 70,000.
If after this, the MTM loss is (say) Rs. 10,000 and there is no cash balance available, will Zerodha sell securities to raise cash or will Zerodha charge interest?
We will charge interest on the debit.
1. When the margin money is paid to Stock Exchange, is it like a pool or is it paid customer-wise (like in Equity segment)? In other words, does the Stock Exchange know against which customer account the margin has been provided?
2. Earlier, Zerodha was not financing so there was no risk of default by customer, but now that risk exists, even if low. What happens when a customer defaults? How do other customers get affected? Supposing I have some balance with Zerodha. What is the possibility that this balance is used towards margin payment for other customers and then not returned due to other customer’s default?
3. What are your risk management guidelines? As you don’t distinguish between a person having 90% margin (low risk) and having 20% margin (high risk), how do you evaluate risk? Or do you consider risk for all customers as equal?
4. Is it possible to share Zerodha’s financial statements?
1. It is like a pool. Yes exchanges know individual client margin, positions, holdings etc.
2/3. The capital deployed for funding the shortfall is less than 10% of Zerodha’s own liquidity. So it is a very small portion. Also as you know we allow positions only if there is atleast 50% in collateral (after haircut which is quite high on Indian exchanges). So the risk is extremely low, and even if something were to go wrong, it is just a fraction of Zerodha’s personal funds being used.
Of course we distinguish between high and low risk guys. You don’t get to see it in the front end, but our risk team at every point knows who is highest risk on the system. We are one of the few brokers in India who auto square off positions if risk goes beyond what we are comfortable with. We don’t make a phone call etc, we send a SMS and square off.
We are privately held, can’t share detailed financials. I have publicly spoken about our revenue and profitability.
Thanks Nithin. Gives confidence. And I hope you never lose sight of risk management even as you expand.
Nithin, could you publicly disclose general stuff eg, your Shareholders Funds, Short and Long Term Debt taken and given and any off balance sheet liabilities. I am not interested in your P&L account, just your Balance Sheet. Thanks.
We are bootstrapped – so no outside shareholders other than employees holding stakes in the business. Zero debt/liability.
Just what I wanted to hear. A start-up that has no debt is very hard to kill 🙂 Your competitors are served to you on a platter then.
IF I AM CE+ OF ANY SHARE, WHEN I WANT TO SQUARE OF I.E CE- OF SAME STRIKE AND SAME EXPIRY DO I NEED TO HAVE MARGIN FOR SUCH OPTION WRITING
No you don’t need. Margin required only if taking a new short option position.
Is it possible to pledge in Account A and get the margin in Account B?
No
Dear All,
In previous comments it has been stated that for the shares pledge with the ZERODHA, dividend will get credited to Zerodha co. bank account and then it will be transferred to the our bank account or our ledger account. now my question is Two fold.
First how do I keep track of this whether the exact amount of Dividend has been credited to by ledger account or not.
Second once shares are pledged i will not receive any communication from the listed company about, AGM, EGM, notices or dividend instruction. In That case i cannot email to the company for getting Annual report in physical format as listed company will not recognize me. hiow can i get physical copies of the annual report for the shares which are 100% pledge with zerodha.
Companies give out data of the dividend declared per share and we’ll know how many shares you’ve pledged. This helps us reconcile on the dividends due to you which get credited to your ledger on a weekly basis.
For annual reports, my suggestion would be to pledge all but 1 share. This way, you’ll receive the annual reports.
Hi Sir,
My query is that since i opened an account with only equity trading am i able to do trading on futures and options?
No, if you haven’t enabled F&O while account opening you can’t. You can sign the segment addition form, attach the proof and send it to us to have it enabled.
hi Nithin,
I don’t trade in F&O but would like to avail margin against shares to be able to buy when opportunities arise. Transferring funds and getting it moved to trading account is a task, need to call customer care at least twice after uploading screenshot on Q. Instead of losing a trade opportunity, it’d be good if we could use margin and fund our account till EoD.
PS – sent a mail to support last evening, only rec’d an auto reply and yet to hear anything
Thanks,
Kunal
Kunal, you can use payment gateway for instant fund update. No calling required. You can also pledge stocks by logging into Q as explained in the post above. Can’t find any ticket with your email ID used to ask this question.
Appreciate the response, Nithin.
The account is in my wife’s name & our bank account is with IDFC Bank, which isn’t supported by the payment gateway. So, we use the IMPS option.
Will try the margin facility sometime, thanks.
Best!
I request you to make the pledging and unpledging of shares on real time basis. It really helps to book the profit in the share and switching over to other share.
Vaibhav, this will take some more time. Unlike other brokers we dont’ keep the stock in the pool, it is actually pledged with NSCCL.
Hi,
If I have 1 Lakh worth liquidbees in my account and I pledge some stocks with Zoerdha for which I get Rs 1 Lakh margin and I take a short option position requiring 2 lakh Margin, would I be charged any interest?
No
Thanks Nithin!
Nitin,
In Mr. Abhishek’s case above, the Liquidbees need to be pledged to be considered as cash equivalent right? Or just holding them in demat will suffice for his scenario?
I have read some answers from your colleagues, they say “pledged” liquidbees are cash equivalent. Please clarify?
Good Morning Nitin Sir,
Along with necessary proofs I have given the request to enable Futures and Options. I want to trade in Futures and Options starting Monday.
Tomorrow being a week off, Can you please expedite and make it enable by today? Can you do this favour? Please.
– Kishor.
Best to send such queries/requests directly to [email protected]
Thanks*
Is Mutual Funds pledging enabled yet? If yes, what are the haircuts?
Not enabled Namit
I have applied for IPO of certain company through my bank a/c and got those shares in my zerodha demat a/c. however i cannot see those shares in my Kite or Q account. When will i be able to see those shares in my a/c. Also, can I trade those shares using my zerodha trading a/c?
Thanks.
Vinay, you need to check if the IPO shares are alloted to you. It might take a while.
Yes. I have confirmed it on CDSL site through CDSL Easi and even got a mail from NSE. Also will i be able to trade them using zerodha trading account?
Yep, you can absolutely trade them from zerodha. If you are still not seeing on Kite, can you send an email to [email protected]
Suppose I pledge 1lk LIQUIDBEES and get the corresponding 90K margin (which is cash as per this blog post). Then I write an option. If there is MTM loss on this option position, will my account be in debit and interest charged?
Yes, MTM losses have to be brought in cash otherwise interest charged.
Is the SBI Nifty 50 ETF included in the list of etfs eligible for pledging? It doesn’t show up in the Google Docs list.
There’s an algorithm that decides the stocks on which margins can be provided. SBI ETF doesn’t fit the bill yet and hence isn’t included in the list.
Thanks Venu.
Is this a decision by NSE or is it a Zerodha process decision?
If you compare, both NSE & our list almost matches. SBI ETF isn’t available as per NSE’s list as well.
Would it make any difference in holding with a different exchanges. If i have some 1lakh worth of stocks in BSE and other 1 lakh worth of stocks in NSE, Will the system consider both the scripts for collaterlal margin ?
Once in your demat holding, it doesn’t make a difference if NSE or BSE.
Thanks for putting up this page. I am currently not a client. There seems to be some confusion re: pledging client securities for FO. This NSE circular (specifically, page 2 of the annexure – quoted below) seems not to allow it : “However, Members can lodge their own securities only to the Clearing Corporation and not the clients’ securities.” Pledging client securities for FO does seem like common industry practice which this circular seems to disallow.
Could you confirm if NSE is allowing pledging of securities for FO?
http://www.nseindia.com/content/circulars/INSP20638.zip
Collaterals as Margin
In Equity Derivative Segment and Currency Derivative Segments Members are allowed
to accept approved securities from clients for margin purposes. However, Members can
lodge their own securities only to the Clearing Corporation and not the clients’
securities. Where Member has accepted securities with appropriate hair cut for margin
purpose, but has to deploy his funds for meeting margin requirements of the client at
the Exchange, Members may levy interest or delayed payment charge on debit balance
as per the terms consented by the client.
Providing margins against securities is allowed, pledging client securities with the clearing corporation isn’t. We don’t pledge client securities with NSE/NSCCL.
Thanks Venu.
Can you please create some short video on this with FAQ metion in comments ?.
It will be become very easy to understand in short time.
It’s difficult to explain this over a short video and hence the blog. Let us know if you have any specific queries.
can any debt fund be pledged if yes kindly give the list of funds
All the ISIN’s that can be pledged are here: https://docs.google.com/spreadsheet/ccc?key=0Aj0Cuw1XVkpddDFHUGd5TXhVUEFBWWtuU1BOMmY5ckE&usp=sharing
Nothing apart from this can be pledged.
if I have pledged 5000 hdfc, and shorted 5000. future. How much cash I have to keep.
You can compute the margins for 5000 Futures from the margin calculator here: https://zerodha.com/margin-calculator/SPAN/
50% of such required margins have to come by way of cash.
can we see on nest. Will it be from cash received from pledging shares.
Pledged margins are show under the “Direct Collateral” column on the trading platforms.
Your unpledge margin policy is a bit different .As the money on sale of equity comes to you first pledged shares should be allowed to be sold.
I would like to have a demo of your trding platform,how can I do this?
For you to sell shares, they should be shown on the terminal. Pledged shares aren’t shown on the trading platform and hence you can’t sell them without unpledging.
For the demo, please leave your number here: https://zerodha.com/open-account & a Sales manager will give you a call and give you a demo.
Can I pledge Sovereign Gold Bonds??. If yes what is is the haircut??
NO this can’t be.
pledging stock manually is not a right way it should be automatically pledge holding as per hair cut. All other broker have this facility and i suffer a lot due to this manual pledge system as i tried to pledge my holding for three times but still today it is not pledge i have waste my 8 treading days without margin .when i mail to support they give me assurance that your query is be resolved tomorrow but still no tomorrow will come. god knows when this problem will sort out,so i request to introduce automatic pledging of holding.
Jayesh, pledging takes overnight, our current system can’t give you money immediately. We don’t keep any client stocks in our pool account, hence it takes overnight to give you margin on the stocks you pledge. It shouldn’t take 8 trading days, checking this.
i know it take T+1 days but u can check my account rs3039 and how much time i mail for my query and your staff member shreedevi know it very well. my last pledge request is also currently pending after three days of pledge.so check your programming system why this is happening.
Jayesh I did, some issue with POA for your account to be registered on CDSL. Without this we can’t debit shares to pledge. I am getting them to expedite a fix.
Hi Nithin,
Do you plan to accept MF as collateral? How much times it takes? Will you accept all types of MF? what is the hair cut?
Thanks
Jegan
Jegan, it will take us longer to start accepting MF as collateral.
Nithin,
As per exchange rule, broker can accept FD as collateral for option selling. Most broker accepts if the capital is high. Why zerodha is not accepting FD collateral? I am getting 10% hair cut with liquid bees where there is no hair cut for FD as per exchange rule.
Thanks
Jegan
Exchange will accept FD’s only if it in the name of the broker and not the client. It is just a complicated process to move the FD from your name to our name and then pledge it. We might start in the future.
no broker in india provide margin for FD.
Hi Nitin,
Suppose I plaged some shares and used the fund for intraday trading in F&O (no carry forward). If I doesn’t have 50% margin in cash but ensured that MTM balance is positive, will it attract for 0.05% interest.
Please clarify as I am looking forward to take advantage of this feature.
Atul, no there won’t be any interest. Interest is applicable only when positions kept overnight without enough cash.
Dear Nithin ji
Suppose i have pledged Rs 1 lack worth liquid Bees and no cash in my trading account, if i wanted to buy options how much amount allowed for NRML and intraday basis ?
No, margins obtained from pledging liquid bees can’t be used to buy options.
Hi Venu,
a. Let’s say I have pledged 1 lac worth of liquid bees.
b. I have sold Nifty option on MIS basis. (as I can not use it for buy option – not sure why ?)
c. Why is that even to keep the square off position (SL-M) order against the position in (b) I would require complete margin in cash ? Is the net loss not enough ? Just to keep the SL-M orders, cash has to be kept idling in the a/c.
thanks
When you buy options, there’s an outflow of cash. Money moves from the buyer of the option to the writer of the option. Since margins raised from collaterals is not ‘cash equivalent’, you can’t buy options with pledged stock. However when you write options, only margins get blocked, there’s no outflow of cash.
If you already have a positions as indicated in (b), there’s no requirement of cash.
Hi Zerodha Team,
Say I have pldged 100 Q of Security X today. And again after some days I pledge more 200 Q of the same security. I will be chargesd Rs 60 for a single time or in both the transction.
Yes, Rs 60 charged everytime you pledge.
hi Nithinji, My Question is dont we get exposure / Limit to buy Equity (Cash) basis the holdings we have ? we can transfer funds within Exchange timeline (T+1 / 2) or same day evening
Aashish, for now we don’t. But it is on our list of things to do.
But Nithinji, How do we invest then ? Deciding much in advance is really impossible. Request your help over here
hi kamathji,
please let us know if this has been enabled
Ah not yet, give me 3 to 5 days more.
hi,
i learn that the pledging and un pledging charges are Rs.60 per scrip.
but the duration of pledging is not mentioned anywhere.
i want to know once a script is pledged for Rs.60 how long will it remain pledged
You can keep it pledged for as long as you want.
thank you for the reply
if i have pledged 100 quantity of a stock earlier
and if i purchase the same stock and pledge the additional 50 stocks
will there be pledging charges again
Yes
This does not seem to be fair. In fact, there are many brokerages who do not charge a single penny for the pledging and also the whole process for pledging and removing the pledge is very quick. I appreciate your brokerage is very low but then charging money for such processes demeans the whole concept of low brokerage house.
Tara,
The actual pledge process involves stocks moving from one demat account to another. The process of moving stocks from one account to another attracts transaction charges, these are charged by depositories. We’re only trying to recover fees here at actuals.
Sir,
I have few questions, it would be of great help if you clarify on the same.
1) What’s the difference between Span and Exposure Margin ?
2) Do I have to maintain extra cash in my account for daily MTM for futures and options ? For example for selling a Nifty 9000 CE , it requires a margin of 60,000 Rs and I have exact 60,000 in my account. I have sold the option at 115 Rs premium but at end of day premium has gone up-to 150 Rs, so should I have to keep extra cash in my account for this MTM loss, and extra is not present will my position be auto squared off ?
3) Can I withdraw the premium collected by shorting options ?
1. SPAN is the minimum margin required to hold position overnight, below which exchange charges penalty. Exposure is the margin that exchange blocks over and above the SPAN.
2. Yes you will need to have MTM in cash to continue holding position. Typically square off happens when losses exceed 20% of total margin.
3. Yes you can.
Can i use collateral margin for buying MCX contracts
No
Can collateral margin be used to buy securities in cash segment.
No Vinoth.
In case of using Collateral margin for taking taking overnight F&O position 50% cash rule is not applicable for Liquidbees. So i can maintain required margin for Carry forward in liquidbees and MTM in cash. is it possible.
Yes, you can.
Dear Nithinji,
I’m a “NSE NOW” user & having few queries regarding “Stock Pledging”. Requesting you to kindly clarify….
1. Can a “NSE NOW” user trade (Intraday or overnight positions in Futures) with only “Collateral Margin”, keeping “0” (Zero) balance in his/her trading account like other “NEST” users? (e.g. you’ll charge 0.05% per day for overnight positions).
If “Not”, then how much cash margin (in %) should we maintain in our trading account, which will allow us to trade with this “Collateral Margin”?
2. What is the time limit to reimburse (to balance MTM capital) the amount lost in trading, before that Zerodha will not squire off our pledged shares? Is it within 3:30 pm of the same trading day or before the starting of next day trading session?
3. You charge 0.05% per day on 50% of the “Total Margin” if requisite cash are not available in the account. If one Hedge his position, then will you charge on 50% of “Total Margin” of each of the scripts separately or on 50% of “Total Margin (deducting Spread Benefit)” only?
Thanks in advance.
1. Yes you can trade with collateral margin. For intraday, no interest charged for intraday. Yes you can trade without any cash for intraday.
2. To carry forward position to the next day, you need to have 50% in cash and 50% in collateral. If you don’t, there is interest charged. If total margin is below 80% of exchagne stipulated margin, positions squared off.
3. 50% of total margin, whatever is blocked by the exchange (after reducing spread benefit)
Thanks for your prompt reply & it’s nice to know that “NSE NOW” users will get the same facility like other software users.
I think, earlier I couldn’t able to explain you my 2nd question clearly.
Say, I’ve Rs.1 Lac as “Collateral Margin” with “Zero” cash balance in trading account. Now, I’ve bought 1 Lot of ‘‘Banknifty’’ and sold it with a loss of Rs.2000/- in total. Here I need to “REFUND” Zerodha Rs.2000/- as I’d no cash in my account, otherwise you’ll sell some of my pledged shares (if I understand correctly). So my question here, what is the time limit for this “REFUNDING”? Is it before 3:30 pm (end of the trading session) of that same Trading day or I’ll get a chance up-to the starting of next day Trading session?
And another question, an “IL&FS Demat Account” holder also can pledge & get the “Collateral Margin” facility in Zerodha, isn’t it?
Thanks again.
You need to bring it in before 3.30pm. For pledging, yeah, IL&FS also works.
Thanks.
Hi,
What if – I pledge the same stock after some days in 2 instances but, unpledge at one go?
eg- I pledge say- TCS (100 shares today) and after a week 50 shares more of TCS are pledged … making total of 150 pledged shares of TCS….
After sometime, I unpledge all the 150 shares at one go…
How much would be the total charges?
Rs.120 would be charged.
Dear Nithin
I am bit confused on the the following point –
“Exchanges stipulate that for overnight F&O positions, 50% of the margin needs to compulsorily come in cash and the remaining 50% can be in terms of collateral margin”
If this restriction is imposed by exchanges, should not it be applicable to all brokers ;
I have traded in F&O by pledging my shares in ICICI Direct and 100% margin was allowed in terms of collateral. There was no requirement of maintaining 50% margin in cash. Could you pls clarify..
Yes, it’s applicable to all brokers. You can offset the cash margins with collateral margins no doubt, but in such case the broker’s cash margins get blocked. We charge interest for whatever cash component of the broker is blocked.
Thanks for clarification Venu…
In case of F&O overnight carry forward. Required margin can be maintained only in the form of pledged liquidbees instead of cash. As i read above that 50% cash rule is not applicable if liquidbees are used as margin. Am i right
Yes
the margin benefit for a calendar spread would continue till expiry of the near month contract. Is this applicable to Equity segment
Hi,
I opened account with great expectations on quality of service. Let me congratulate you on being successful beyond expectations. There is only one thing that I would like to see on your services. Please star agri commodities. I was surprised that trading is not allowed in these commodities. Are there any specific factors that prevent you from providing these services.
Shikha, agricommodities are very tough to manage risk. Usually contracts moving in circuits. There is also the liquidity risk. At our extremely thin margins, it doesn’t make sense to take this risk for us as a business.
hi nitin,
it takes atleast 5 days to get margin after buying a stock. can you make it in 2-3 days?
regards,
barun
It takes 2 days to get delivery of stock, so it won’t be possible in 2. But once in your demat, it should just take 1 more day. We can’t count weekends and holidays though.
Hi Nithin,
When I buy on monday, we can not pledge them before Wednesday evening or Thursday morning , then everything(technical) goes right i get the margin on Friday. It will be useful if there was an option of automatic pledge on delivery.
Not all clients would want to pledge on delivery, so it’s a little complex.
That’s why I said an option of pledging.
Is mutual fund available for pledging?? If not, any idea when can we expect it??
And thanks a lot for the pledging facility of shares. Helping me a lot personally.
One last thing, if we trade intraday using the pledge margins and 50% of that margin is not maintained in cash. Will interest be charged on the shortfall in this case??
No, we aren’t accepting MF pledge yet due to operational issues. No interest is charged for Intraday margin utilization.
Why does the pledging process take too long(2+ day) and there is a fixed fee of 60+60 for pledging…..also it does not list in your portfolio tracker…
The most expensive trading company ICICIdirect does not charge any amount for pledging and it is instantaneous pledging and unpledging…
Also even with pledged amount, I cannot place a cash order eventhough I can bring in the cash on the third day….Pledging is available only for speculative trading…not even for BTST ….
Hi
Can I use the pledged amount to buy/sell intraday equitites?
Our system currently allows you to, but ideally you shouldn’t.
Nithin, could you please elaborate on this: “…but ideally you shouldn’t.”
So, one can trade intraday equity cash segment using liquidbees collateral? But, you say we shouldn’t be doing it? Why?
This is because in the case of intraday equity trades, it’s always possible that you are unable to square-off the position due to illiquidity or the stock hitting circuits. In this case, you’re forced to take/give delivery and the account will do into a debit.
Hi
Please check option of giving margin for delivery with minimal interest rates.
what other instruments other than Liquidbees are considered cash equivalent ?
Only liquidbees
If I have INR 1,00,000 worth of LiquidBees in my demat account, can I pledge this to buy securities in cash?
No, you can pledge stocks to trade derivatives only.
Hi,
I have liquidbees in my my account…and I want to pledge the liquidbees for the intraday trading….Will i be charged the interest 0.05% of the margin on trading intraday…If i donot maintain the cash margin…
Firstly, you can pledge and trade only F&O, not equities. NO interest applicable if you use liquidbees, both for intraday and overnight.
First of all congratulations for a fantastic platform. Both the mobile app as well as web based kite are mind blowing.
Now to my question/query.
Lets say one fine morning the stock market collapses by say 50 % whereas clients have only given margins of 12 % to 16 % and god forbid Zerodha defaults/goes bust then in that case does the exchange sell of all the pledged stocks even of the client who has sufficient margin and is not in default??
This is very important as in a way it penalises the client who wishes to keep large amount of safety margin and hence keeps larger ledger balance as well as securities pledged with Zerodha. Or does the exchange know which client/s are responsible for default and hence only invokes their pledged shares???(sounds unlikely)
Also do the shares in Zerodha demat, (which are not pledged) , get affected ??
If we are talking about such a scenario, yes no matter which broker you are trading with, if the broker gets into trouble and defaults the exchange can square off the pledge stocks first. If stocks are in your demat, exchanges can’t access it.
Thanks for your reply and making things clear.
Also a suggestion that in the lmobile app the “free cash” should be termed as margin available.
Nithin, Can I use margin against share for commodity trading?
Not allowed by SEBI
I had bought liquidbees in my account and pledged them to trade against them as margin…I just wanted to know how and where will i recieve dividend on the liquidbees on the pledged holdings of the same…
Dividends will be credited to your demat account itself as new units, once every month.
If loss more than 50% of the money in the account, the position gets auto square off, unable to understand it properly. Let’s say for an example. Suppose i have a total account value in commodity section is 10k. If i bought a share of only 1 quantity silvermic aprilfut as normal, margin used for this is 4100 so i have left with 5900 now. Here i want to know will my position gets auto square off if loss exceeds 50% of margin available that is (5900) or it will be square off if loss exceeds 50% margin used that is (4100). Confused !
Only if your total account balance drops below 2000 (50% of 4100) will it get squared off. That is if you make Rs 8000 loss
Can we pledge Mutual fund ?
No
But, Y?
Sir,
If I hold 50% of my margin in the form of liquidbees and rest of 50% I shall use from collateral margin against equity stocks. Would I be free from every kind of debt interest.
You can’t use collateral margin to buy other stocks.
Say, I have 10 lakh rupees of margin available from pledging of X no of shares of a Stock Y.
and I have 10 lakh rupees of margin available from pledging of LIQUIDBEES.
And i have no other free cash besides the above two.
Now, I use 20 lakh rupees as margin against Selling any option derivative on NSE.
Would I be liable to pay any interest against any kinda of debt ?
No, there wont’ be any interest cost. Liquid bees are considered as good as cash. But do keep some cash in the account for MTM, in case there is a loss.
If I short sell options the margin of which totals 15 lakhs, I have 10 lakhs worth pledged stocks, 5 lakhs worth liquid bees, I suppose I still need 2.5 lakhs of cash.
Now, what happens to the short option premium which is to my credit, is that added to the cash balance ?
In that case my cash requirement is reduced to the extent of the short option premium credit ?
Please confirm.
TIA
Short options are credited to your account the next day. Yes your cash requirement reduces after this credit.
# Date Margin blocked Cash balance Debit balance Interest
1 2017-02-16 0.0 ₹-76,224.92 ₹76,224.92 ₹38.11
2 2017-02-09 0.0 ₹-76,259.92 ₹76,259.92 ₹38.13
3 2017-01-22 0.0 ₹-66,253.31 ₹66,253.31 ₹33.13
4 2017-01-21 0.0 ₹-66,253.31 ₹66,253.31 ₹33.13
5 2017-01-20 0.0 ₹-66,253.31 ₹66,253.31 ₹33.13
6 2017-01-19 0.0 ₹-66,345.41 ₹66,345.41 ₹33.17
please note that above is the interest charged on debit balance.
but i had collateral available on the said dates too and collateral amount was more than the shown debit balance and less than the free cash.
i dont understand why am i charged with interest.
besides, the interest charged as shown by Q was nil uptill 24-03-17 and appeared only today ie 27-03-2017.
PS: my client id is SA0647.
hope the unwarranted interest charge is reversed soon.
Getting this checked, will get someone to revert.
When will you start including investments in equity MFs to be pledged for F&O Trading
Hi Nithin,
Will the good till cancelled orders be available with Zerodha?
This is really helpful when placing stoploss orders since it is difficult to place order everyday.
You may keep certain validity like 10 days or 20 days till which the order will have validity.
On our list, will take some time.
Hi, Nitin can you pls help me clearing a doubt?
I’ve pledged some securities & can see its value in ‘collateral’ section in kite app.
But as we’ve to keep 50% in cash for F&O overnight position, i get confused with this.
May i know is that ‘Free Cash’ section also includes Full collateral margin/50% collateral or its the pure cash i’m holding with me for the day.
Free cash is shown on Q. Here’s an explanation of it: http://zerodha.com/z-connect/tradezerodha/q-reporting-analytics/pie-chart-on-q-for-quick-overview
Free cash includes only the cash component.
You should make it more simple. Instead of next day pledge and next day unpledged it should be done on same day.
More over the stocks are in your own DP so why the problem. Others are doing even in more simpler way by not going to pledge and un pledge business. Just allow limits on the basis of holding.
Stocks are inturn pledged with ILFS and there’s a charge for same day unpledge. We’re working on making same day unpledge happen. Give us sometime.
I need to know about margins in FUTURES segment. Can any body pl guide me where this information on this site will be available.
My problem. I have placed a future order with stop loss. I could not understand the difference between the cover order and bracket order even after going through many posts on utube on this subject. The whole problem is all inputs are for people who know basics but of no help for a lay person like me.
Coming to the problem I have placed an order for a future with a stop loss. The margin is lower. Purchase is done, no stop loss hit and price is above stoploss. So whether this future position will be carried next day or will be squared by RMS.
There are different product types under which you can buy a futures product: MIS/NRML/CO/BO.
MIS/CO/BO are the intraday product types; meaning these positions get squared off by eod.
NRML is our carry forward product type. If you buy/sell a Future under NRML, you can carry it forward to the next day provided you have sufficient margins in your account. You can calculate the margins for futures position using this tool here: https://zerodha.com/margin-calculator/SPAN/
Now it is clear.
Sir,
I want to know the margin for USDINR futures contract. I could not find it here:
https://zerodha.com/margin-calculator/Currency/ .
Like for instance,for shares futures its pretty straight forward here: https://zerodha.com/margin-calculator/Futures/
Thanks in advance.
Use this: https://zerodha.com/margin-calculator/SPAN/
Select the Exchange as CDS and you’ll be able to ascertain the margins. Margins to carry forward 1 lot of USDINR is 1,591.
Hi, I had Kotak trading account before shifting to Zerodha and I noticed they were providing margins based on the stock holdings as a percentage of stock value based on the quality of stock (with out any pledge) which can be used in F&O or cash market trading also. I am not sure if Zerodha has any such options. Suppose I have 900K holding in my portfolio and I don’t want to pledge any particular stock but get some 300K margin for trading (may be with an overall sell restriction for the portfolio based on the margin utilized), is it possible? It will be very helpful if this option is there like it was there in Kotak securities, this will allow us to utilize our holdings anytime without pledging and with adequate safely for Zerodha because of overall restriction on selling holding beyond a point when margins are used. Thanks!
“So margin received from pledging liquid bees will be as good as having cash in your trading account”. But we cant use it for buying options. ????
Any way around ? because to create cash need to first un-pledge the bees & then sell ( minimum 2 days ).
Unpledging takes overnight, u can sell and buy options immediately. No need to wait for clear credit. We are working on ways to give instant unpledge soon.
What securities are considered as “Liquid bees ” ? does it include largecap stocks like INFY, RELIANCE ?
Liquid bees is kind of security, it is an exchange traded fund. CHeck this link.
say, i have 1000 shares of Liquid BeES and i have pledged them for margin.
now, the question is when i will receive the monthly returns of liquid BeES in the form of shares itself, Will those shares be added to pledged shares or will I be having them in my Demat account?
Hi Nithin,
Can you provide me some timeline you will start instant unpledge.
Thanks.
We are working on moving into an in house backoffice tool, hopefully soon after that. Around 2 months at max.
please reply to this query?
say, i have 1000 shares of Liquid BeES and i have pledged them for margin.
now, the question is when i will receive the monthly returns of liquid BeES in the form of shares itself, Will those shares be added to pledged shares or will I be having them in my Demat account?
Yes, units of liquidbees come as new units. Gets credited to your demat account monthly.
i have bought 98 shares of liquid BeES on 20-03-17 and have pledged them.
As on date, I have not received any additional shares as returns.
my client ID is SA0647.
Hi, I want to know if liquid bees are sold then whether amount can be used for buying shares CNC on the same day or not. This is because I have noticed that your pi system is not allowing to do so. Thanx.
That shouldn’t be happening. You’d be able to buy. Was there any rejection error you got? Can you please write to [email protected] and we can check.
I have Loan against shares account with HDFC bank for which i want to pledge my shares from Zerodha account. Please guide process
Narendra, you would need to provide us with the pledge form along with the agreement copy between you and the bank. Please write to us at [email protected] and someone will assist you with the procedure in detail.
TCS has recently given buy back offer to its investors.
I have 50 TCS shares pledged. I did not receive any information on it. I do not get any communication related to my pledged shares regarding Buyback, dividend, companies AGM, Bonus issue, etc..
As per my understanding, Even if I pledged my shares to get the trading margin, I am still entitle for all the corporate benefits.
Please do let me know how will I get the communication related to pledged shares and especially for TCS buyback offer.
Yes, Naveen. Even though you’ve pledged you are eligible for Bonus, Dividends and other corporate actions. But in the case of a buyback, you’d need to have the shares in your demat account as on record date to participate in the buyback and receive the tender form. You would have been eligible to participate had you unpledged it before 05/05/2017.
For example: If there’s a dividend declared when you pledge shares, although the shares aren’t in your possession, you will still be entitled to receive benefits of all corporate actions since you’re the ultimate beneficial owner of such sharesThe broker will pass on such dividends to your account.
why don’t I get a response.
i have bought 98 shares of liquid BeES on 20-03-17 and have pledged them.
As on date, I have not received any additional shares as returns.
my client ID is SA0647.
Aaqib, You’d have received additional unit in your demat account. Check out here to register to Easi and create a CDSL login to view your holdings.
Hi can i buy options with liquid bees pledged margin.
No
Dear Nithin
thanks for quick reply but i have two more question suppose i pledge 100 number of liquid bees with you and also same amount of other share like sbi i pledge with you for margin requirement, so in this scenario first question is when i will take overnight position in future how you will cut margin? fifty fifty from both liquid bees and other pledged share because liquidbees i am considering same as a cash please clarify this.
second question for same scenario if i made loss in my position and there is no hard cash in my account so for recovering the loss what will you sell first Liquidbees or other pledged share?
1. Yes 50-50 from liquid (as cash) and rest from stocks.
2. Liquid bees. It is best to keep MTM cash in your account.
Thanks Nithin
Hi Nitin / Zerodha,
Can you please add newly listed Govt company “HUDCO” in your pledge list? As it was 10-12 days of listing the price is stable now and you can add to pledge list. Kindly reply.
I have query on pledge shares. After pledge, shares are debited from DP account. From DP where they goes?
Can zerodha sell them even if I have enough margin and use funds? Once I unpledge, zerodha can buy shares from market and give me back. How zerodha make sure that this fraud does not happen?
The shares get pledged with NSCCL (National clearing corporation). No, we can’t sell them, there is a trail to everything that happens after you pledge a stock. Also unlike traditional brokers we never keep any stock in our pool account.