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,
Hi team ,
can you please help in understanding
– interest rate ion collateral margin post pledging?
– can the collateral amount be used for long term equity holding?
TIA
Hi Amit,
There aren’t any interest charges for using collateral margin, however, you must maintain a 50% cash component in your F&O trades; otherwise, interest will be charged on the shortfall and any unfunded F&O losses at rates of 0.035% and 0.05% per day, respectively.
No, these margins can be used for equity intraday trading and futures & options writing (equity and currency F&O) only.
I have a zerodha account. I had 201 shares of Varun Beverages. Out of this 191 were pledged. and 10 were open. The stock went through a stock split of 2:5.
The pledged qty is still showing the same numbers 191 while the open qty is revised to 25. The face value of Rs 5 has become Rs 2. Why the pledged qty not updated to 191*2.5 as per the new split ratio. Its showing a serious dip in my PnL. Please help resolve.
Hi Sudhir, we’re sorry to hear this. Could you please create a ticket on: https://support.zerodha.com/ so we can have this resolved at the earliest?
Can we use 100% pledged collateral margin for positional option selling without having cash/liquidbees??
When can we pledge zerodha fund house mutual fund to get collateral??
Can we pledge NCDs (secured bonds/ debentures) ? If yes, then what is the haircut ?
Hi Nikhil, you cannot pledge NCDs. You can check the list of securities available for pledging here.
I have mutual fund holdings in MF Utility. How will I pledge this security. Please answer.
Hi Shubham, you will have to transfer the mutual fund investments to your Zerodha account before pledging them. We’ve explained the process for transferring mutual funds here.
is the interest of 0.05% applicable for selling options on intraday trade , if the cash balance is not sufficient in my account , or it is applicable for holding positions
Hi Abhilash, the interest of 0.05% will be applicable only if cash balance in your account is negative overnight.
Hi sir,
Good Day …
Shall we use a Pledge margin 100% for Option selling in intraday or it requires 50% Cash
Hi Yuvraj, you can use 100% collateral margin for intraday option selling. The 50:50 rule is applicable only to overnight trades.
Equity Mutual Funds can be Pludged Now? like -large,small, Midcap funds..Plz Reply.
Hi Shaik, you can pledge mutual fund investments too. You can check the list of securities on which pledging is allowed here.
i had 1600 itc share and i had sold atm call can i wait till last day of expiry or it will required extra margin in the last week of expiry
Hi Naresh, the exchange blocks physical delivery margin only for Long ITM stock options. Since you’re holding a short option position this will not be applicable. You can learn more about physical settlement here.
Does zerodha has made meber-wise limit for securities or is it done by other brokers also? Is it a compulsory requirement by SEBI?
Hi Keshav, the limit is set by the clearing corporation. We’ve explained this here. To check whether the limit has been reached or not for a particular security, you can check this sheet.
I got the Member-wise limit for your security is reached
How to know the what is member wise limit for a particular stock or bond
If I buy GSEC 5 year bonds that are accepted by the clearing organization,
for example 1 lakh gsec..
I pledge it and get Rs 90,000 in collateral Margin.
Question:
My main account has 100rs only.
1. Can I use this 90k, for doing Intraday Equity like buying 100 shares of ITC, with out maintaining balance in cash.
1.1 Will I get margin of 90k, or 450k (x5) for intraday trading.
2. Can I use it for selling INTRADAY without maintaining balance in cash account. (without 50%).
Thanks.
Hi Jayant, you can use collateral margin for equity intraday trades. The intraday leverage you will get will depend on the stock you’re trading, you can check this on the order window on Kite. 2) You can do this too.
However, would suggest you maintain cash in your account to cover for losses and charges as collateral margin cannot be used toward this. If you do not have sufficient cash, your account will result in a debit balance, on which interest will be applicable at 0.05% per day.
can i get margin benefits from an unlisted bond that are being holded in my zerodha acc, if so how much
Hey Tanishk, you can only pledge securities that are approved by the clearing corporation. You can check the list here.
Hello Zerodha Team,
I need clarification on pledging shares. Zerodha follows the rule of [50% Collateral margin & 50% cash/cash equivalent] for overnight option selling positions at the client level. Is the same rule applies to intraday option writing as well or 100% collateral margin can be used for intraday positions?
Hey Mayank, for intraday trades, you can use 100% collateral margin.
The haircut on zerodha is different from the actual haricut on CCIL’s website for government securities. Most securities which have a haircut of 10% on Zerodha actually only require 1% or 3% haircut on CCIL’s official list. Can zerodha please make the update for the same?
https://www.ccilindia.com/RiskManagement/SecuritiesSegment/Lists/RMEligibleSecuritiesforSGF/Attachments/1252/Securities%20Segment%20Notification_26092022_NI_TBILL.pdf
Hi Nithin,
Why and for how long zerodha holds the dividend received on the pledged stocks?
I have not been paid dividend for the pledged shares since Jun 2022. Although the amount is visible in the dividend report downloaded from console.
Thanks
Hey Tarun, the dividend for pledged shares is directly credited to your primary bank account. This doesn’t get transferred to us now. If you are eligible for dividends and have not received even after the dividend payment date, you will need to contact the RTA of the company. Explained here.
Thanks Shubham.
can i buy in hedge strategies like buy a CE and sell a CE of nifty with my collaterral margin of suppose 40000 intraday? margin required is 20000 as per zerodha under basket order . or is it used for only selling and not buying?
Hey Kushal, the collateral margin can only be used for trading futures and selling options, for buying options you will need cash balance in your account.
Have you started accepting mutual funds to provide collateral margin.
suppose i have colleteral balance as 200000(2 lac) and 100000 (1 lac i.e 50% of cash balance) in my cash balance.
now if i take a trade of 250000 (2.5 lac) then how much interest is charged in one month on this trade.
Hey Ashutosh, to trade F&O, you need to have 50% of the margin requirement in cash or cash equivalents. If not, interest at 0.035% per day will be charged on the shortfall of the cash margin requirement. More here.
One of the stock I hold cannot be pledged (not in the approved list): JPpower. Is it possible to request for the approval? if not,
May i know how is the securities approved, I mean on what criteria? (I understand that my second question is related to exchange decision, and we don’t have a say in it, I asked it, out of curiosity to learn)
Hey Harsha, JPPOWER is currently in ASM Stage 1, hence not available for pledging. You can check out more details here. You can check the list of all the approved securities here.
Pledge Margin suddenly removed and positioned in fno open…How is this possible…should give at least a week’s notice to clear the fno position before removing the margin.
This is not acceptable at all…
Suppose someone buys 90lac in Future on pledge margin today without giving any prior notice suddenly all margin is removed. How one can arrange 90lac cash on the same day?
You should give the trader enough time to clear fno position…Forward this to Exchanges.
Hey Somnath, please create a ticket at support.zerodha.com so that our team can check and assist.
Sir, for example I have 300 shares of Infy, which is equivalent to one lot, I pledge these shares and out of that margin and cash, I shorted one call option at a particular strike, on expiry the strike price goes ITM, Can the pledged stocks(without un-pledging) be used to settle at expiry? Or It should should have been compulsoryly un-pledged before expiry?
I don’t want to face short delivery and auction penelity, please clarify.
Hey Kumaresh, you will have to unpledge the stocks before the expiry to deliver them.
Hii Nitin,
Can i use pledge stock margin for Currency Intraday Future trading ???
Yes, Satish. You can use collateral margin for trading in Currency F&O.
Sir, I have following questions;
1. Is cash margin of 50% is needed for intraday index option selling?
2. Is cash margin of 50% is needed for (intraday) index option strategies like butterfly, iron condor, where we use to do both buying and selling of options?
Hey Pradeep, for intraday trades in F&O you can use 100% collateral margin. The 50:50 Cash – Collateral requirement only for overnight positions.
Hi Nithin,
my question regarding collateral margin
50% cash component rule is for positional fno position only or for intraday also?
Hey Kaushik, the 50:50 Cash – Collateral requirement is for overnight positions only. Not for intraday trades.
if i get 1,00,000 rupee by pledging what will be the interest rate? how it is calculated every day?
Hello,
Have few questions please.
1. I want to buy index option only for intra-day purpose can i do that using collateral only ? is cash required ?
2. If Yes and if I make a loss of e.g 500 on intraday trade then what happens ? how this gets adjusted ?
Hey Devendra, collateral margin cannot be used for buying options, for this, you’ll need cash in your account. Collateral margin can only be used for intraday equity, trading futures and short options. You can learn more on this here.
1. In pledging Is 50% cash requirement needed even for intraday options trading where no overnight positions will remain?
2. Do pledged collateral automatically unpledge every day or it can stay pledged as long as we need. So if I pledge today I pay 30₹ and I can keep it pledged say for one year without need to pleading it again during that period?
3. While buying mutual fund from your pledge approved list do I need to buy from coin app or kite app. What is the difference.
4. I would request you to have a dedicated blog detailed pledging and charges explanations for intraday options trading (specially short straddle etc) without any generic info.
Hey Akash,
1. For intraday trades you can use 100% collateral margin. The 50:50 Cash – Collateral requirement is only for overnight positions.
2. The securities you have pledged will remain pledged until you unpledge them.
3. You will have to invest in Mutual Funds through Coin, it is our mutual funds platform. Through Kite, you can invest/trade in stocks, F&O etc.
4. You can check out all the charges here. Also, you can easily calculate all the charges using our Brokerage Calculator.
If you have any queries, you can reach out to us by creating a ticket on our Support Portal.
Suppose I have Non cash component collateral as 400000 and cash component collateral as 200000. So total collateral as 600000.
I understand that
1) No penalty will be levied if i have used total 600000 for intraday option selling. and
2) penalty for 200000 (400000 – 20000) will be levied for positional option selling.
Kindly clarify my assumption.
Thanks well in advance
That is right.
Hey Uma, right, you can use the entire collateral margin for intraday trading. However, for overnight positions, you will have to maintain minimum 50% margins in cash or equivalent and the remaining 50% can come from the collateral margin, using a collateral margin more than 50% will attract interest on the excess margin used. You can check out more details here.
If that is so then the above answer from Zerodha team is incorrect, Uma will pay interest on 1,00,000 in case of overnight position because cash component required is 3,00,000 and available cash is 2,00,000
Is Zerodha is accepting FD as a collateral for F&O trading ?
Hey Surreddy, we accept Equity stocks, SGB’s, G-Sec & MF’s for collateral margin but not FD’s. You can check out the list of securities available for pledging here.
What is the meaning of 0.05% per day of the debit amount?
I have 1000 shares of NMDC and I will get 1.4L by a pledge, so do I have to pay this interest on 1.4L?
Hey Mitul, no, the interest charge of 0.05% is only charged on the shortfall amount or the debit balance in your account.
Hi,
for how much period we can used the pledged margin for F/O trading like 1 year -2 year or till we unpledged it..
and if ans is till unpledged it then the charges that you take 30 rs for pledged and haircut is approximately 8% for liquidbees is taken for once only?
Hi Team,
I have pledged but i not used the amount for a 7 days and unpledged on 8th day . Whether it interested will be calculated for a 7 days ?
I am have 50% margin as collateral and 50% in cash, If I am doing a calendar spread, the margin required is around 35k for nifty, I am having a total margin of 40k. As the days passes I will be incurring the loss in the option which I have bought and will make profit in the option which I have sold. Will I be asked to add more funds? Will the margin requirement increases? Will there be any margin shortage as I will be holding it overnight for many days??
I have a Demat A/C with a broker linked to NSDL and want to continue with this broker for equities.
Can I open an Zerodha Account for Trading in in F& O and can i pledge my shares from the Non Zerodha Demat account as collateral for margin /Option selling ?
you will be able to pledge only the shares only in Zerodha’s demat account.
Sir,
can’t these funds be pledged for margin benefit ?
UTI NIFTY INDEX FUND – DIRECT PLAN
UTI NIFTY NEXT 50 INDEX FUND – DIRECT PLAN
UTI MID CAP FUND – DIRECT PLAN
UTI NIFTY200 MOMENTUM 30 INDEX FUND – DIRECT PLAN
UTI NIFTY INDEX FUND-DIRECT GROWTH PLAN-GROWTH
UTI NIFTY NEXT 50 INDEX FUND – DIRECT GROWTH PLAN
UTI MID CAP FUND – GROWTH PLAN
these are available here – https://docs.google.com/spreadsheets/d/1vRI4NKpJ-3mnOWxUhSRMSQD5txy8QNumzSQrdfGKyL0/edit#gid=0
Dear Nitin / Zerodha Team,
You are requested to add one additional statement in Console under Portfolio tab for Pledged stocks and their valuation after hair cut having following columns
SYMBOL
HOLDING QTY
PLEDGED QTY
HAIR CUT %
AVG COST
PREV CLOSE
CURRENT VALUE (HOLDING+PLEDGE QTY)
COLLATERAL VALUE
Hope you support customer satisfaction with this update in Console
Thanks
Hiresh
Sir , Pledge option not showing on my scripts…
Can I use 50% margin from pledging liquid funds and the rest of 50% from pledging stocks/ other mutual funds? or the remaining 50% should be actual cash?
if i get pledge amount as 1lakh and in my account i m having 0 ruppees. can i use that 1 lakh for intraday equity, future option trading ? is there any penalty for this type of trading in intraday? extra fund needed in account?
Hi,
I want to pledge my shares for intraday index option buying..I’ll maintain the drawdown amount as the cash balance..like 30% cash balance..can I able to do intraday option buying..I read all the comments This collateral margin is only for option selling and futures.. but I wanted to do option buying..
Hello.
As I have learnt, charges for pledging shares are 30+GST per request.
If I pledge shares and keep it pledged for few days, are there any daily charges for keeping shares pledged?
If i have cash collateral of liquid fund, everyday i need to pledge for margin or can i use for option selling some days to months with 30+gst till i unpledge
Hi,
I would like to know few details regarding pledging.
1. Can SGB can be used for pledging?If yes is it considered as Cash Equivalent or Collateral?
2.I read some above comment of Nithin saying once pledge they don’t track where the margin is used.If so then can it be used to buy delivery based equity.
Can you please answer this above query?
1. SGBs can be pledged and they are considered Cash equivalent. There are two separate lists available on zerodha site for non-cash Collateral and cash collateral
2. Pledged Margin can be used for any kind of margin trading.. And EQUITY delivery CNC is not margin trading, you need hard cash for that
3. Similarly – margin can be used for SELLING options, but naked OPTION BUYING is cash product, cannot be done with margin
Scenario1:
I have pledged my shares and got 20lakhs as margin. But have to maintain 50 percent cash to trade in Futures & intraday. If I pledge my Sovereign Gold Bonds worth another 20 lakhs(after deducting the haircut), can I trade for 40 lakhs without keeping any extra cash in my dmat.? (considering SGBs as cash instrument).
Scenario2:
I have pledged only my Sovereign Gold Bonds worth another 20 lakhs(after deducting the haircut), can I trade for that entire 20 lakhs without keeping any extra cash in my dmat..? (considering SGBs as cash instrument).
When I contacted Zerodha regarding this, two persons gave me different answers, and I got confused. Considering the diversified investment and optimisation of the fund I was thinking about the above possibilities.
Hope I can hear from you soon.
Can “Covered bonds” be used as a collateral for option selling ?
i am holding about 5 lakhs worth of bharat bond ETF for pledging, after 8% haircut shall i use the entire amount for my overnight holding position of options or only 50% can be used from pledging and other 50% as cash, please explain
Hi,
I requested for pledge the shares and later i have decided to cancel the request.
Will i get any charges if cancel the request?
Sir,
Is FIFO applicable to pledge the securities?
For e.g.
I bought 10 shares of ABC at Rs.100. After few days I bought 10 shares of ABC at Rs.110.
1) I want to pledge only 10 shares of ABC. Which lot of shares get pledged? 1st lot (Rs.100/share) or 2nd lot (Rs.110/share)? If i want to sell remaining 10 unpledged shares, for consideration of profit, which buy value will be taken? Rs.100 or 110?
2) I want to pledge all 20 shares. After some days I want to unpledge only 10 shares for selling purpose. Is it possible? Which 10 shares will be unpledged? Rs.100 or Rs.110?
Thank you!
The shares bought first will be considered sold.
Can this pledging margin used for Equity delivery?
Sir , can margin obtained by pledging shares be used for
MCX commodity futures trading ? ( these positions can go overnight )
May I unpledged and sell the shares immediately as both are T+1.
can we trade with 100% equity collateral?
could you give some examples of cash equivalents other than liquid bees
I have Liquidbees in my Holdings but i do not see the option to pledge them when i go on console ! Why?
I only see options of 1) Fundamentals 2) Stock reports 3)Set Alert & 4) Create Algo
Sir, I understand that the collateral margin cannot be used for Option Buying (Ie. CE buying and PE buying). However, can we buy Futures with this margin? If so how much cash margin and how much collateral margin is required?
I have pledged CDSL shares and got the margin too. Suddenly, yesterday, CDSL is showing as 100 % haiurcut and amount got reduced from the available collateral. Why it is so? It can further be noted that there is no reduction in CDSL share price recently. Infact, the price has appreciated and there were no violent movements in the share price of CDSL. How such sudden mid of the month decissions be taken resulting cash balance gpoing into negative and the consequent penalty?
hello
I have pledged my portfolio to be used for option selling.
Now if i want to sell one of the stock from the portfolio can i sell it if i already have an equivalent amount of cash in my account so as not to be effected by short of margin/margin penalty.
CAN I COLLATERAL NIFTYBEES
Will Liquid Funds be considered as cash equivalents ? or just Liquid bees !
Hi sir,
If I create Covered call by pledging delivery position, and my call is in deep ITM on expiry, I need to sell my Pledged delivery stock to cover this losses. But If I unpledge it, then I will run short of Margin for my Call position. So , first I have to square off my Call position. If I square of my call position, then my cash balance will be in negative. Can I Square off both the pledged delivery position and call option at the same time for my covered call strategy ?
Hi, If I pledge liquid bees to take position in F&O and once I square-off F&O position, do I have to deposit cash in my account if position squared-off is in loss or Zerodha will recover difference by selling liquid-bees?
Eg: If I buy 1 lot Reliance April Future @ 2020 for which margin is approx. 67000 and I pledge liquid bees of INR 100,000. After few days, I sold Reliance April futures @ 2000 and there was loss of INR 5000. Do I have deposit cash or Zerodha will recover by selling liquid bees amounting INR 5000?
accumulated interest will be debited monthly, what it means….
If I have covered CALL option on stocks pledged. And the option expires ITM (in the money). And I dont square off the CALL option. Will the stock automatically unpledged and exercised?
eg. I have 550 HDFCBANK stock in my account.
I pledged all 550 and got collateral margin after haircut.
Now I do covered call of 1 lot (550 quantity). For this 50% margin I got from pledged collateral. And 50% I provided as cash.
Now this option expires ITM. then will the stock automatically get unpledged and exercised?
After this new Pledging and margin rules of Sep 2020
– Can we use 100 % LiquidBees Collateral margin for Intraday Writing option and futures?
– Can we use 100 % Stock/MF Collateral margin for Intraday Writing option and futures?
– Can we use LiquidBees Cash equivalent collateral margin for Intraday Buying option ?
I have 20+ stocks pledged for margin purpose and wanted to pledge few more stocks but in options it is not showing the pledge or unpledged options. Kindly let me know if there is any time duration for the pledging.
I could pledge in the phone app but not in the web console (Chrome browser). Please check whether there is any issue.
Shares should be unpledged before selling.
What is haircut% in margin for pledging SGBs
Hey Avinash, I suggest you look at the sheet linked above.
I have following questions regarding pledging –
1) Are SGBs considered as liquid bees when pledged?
2) If SGBs are pledged, can I use that Collateral (Liquid funds) margin for equity intraday in cash segment?
3) If answer to Q. 2 is “yes”, since 50% cash rule will not be applicable for collateral (liquid funds) margin for pledged SGBs, can I use this margin when my Available cash is over, or I still have to keep some Available cash?
It will be very kind of you, if you clarify this and send answers on my email id.
Can Goldbees be pledged as collateral ?
JUST A SUGGESTION
CAN WE HAVE A FEATURE WHEREIN WE CAN CLASSIFY OUR HOLDINGS LIKE
1.LONG TERM
2. SHORT TERM
3. MEDIUM TERM
AS PEOPLE CREATE MULTIPLE ACCOUNTS TO MANAGE THESE TRADES WHICH IS FOR LONG TERM 1 ACCOUNT AND FOR MEDIUM TERM DIFFERENT ACCOUNT TO AVOID CONFUSION.SO CAN WE THINK TO GIVE US THIS FEATURE TO CREATE TABS IN HOLDINGS COLUMN
Hello sir,
Is it not possible to buy options using the collateral margin received by pledging?
No
Can we buy bank nifty options with pledged margin.
Can I take a loan against equity in forms of pledge, what will be loan interest rate?
Now that pledging does not move stock out of our demat and they are pledged with CDSL only, we see that other brokers like Angel etc. are providing real time margin on pledge and real time unpledging. So can zerodha not do the same and reduce the time for pledging and unpledging making it real time ??
May I know why is pledging option not available for ” UTI NIFTY INDEX FUND – DIRECT PLAN “.
I have say Infosys shares in my demat account and I want to write covered call on that holding.
Please clarify: –
1) As I have the shares in my demat account, will I be charged margin while writing covered call?
2) If my shares are pledged, can I sell them through Zerodha? Or should I unpledge them first before selling?
Kindly clarify.
” 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. ” is this still allowed or any changes , please clarify.
Same here. My portfolio consists of 70% of LIQUIDBEES. So assuming I’m pledging all of my portfolios and I have less than 50% of the position I’m taking in cash in my account, will I be getting the penalty charges?
if i am holding shares in another dp, how do i pledge in favor of my zerodha account for f&o margin purposes
Hey Dharmen, you’ll have to move the holdings to your Zerodha demat account.
is pledging mutual funds available now?
“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.”
For intraday FNO trading, like option writing can I use 100% margin from collateral? Will SEBI new margin rules affect this?
Please reply to this. I also want to know this.
You will need 50% cash for all positions.
Will the Liquid mutual funds pledged as collateral be considered as 100% Cash equivalent or only 50% cash equivalent?
Hello,
I am not able to pledge my funds which are KOTAKNIFTY and KOTAKBKETF.
I came to know from zerodha support that – the number of securities which can be pledged is limited member-wise by the clearing corporation. And that limit has already been crossed for these 2 funds.
So I wanted to know the names of the ETFs (based on NIFTY and BankNIFTY) which have still not crossed this limit. So that I can buy them and pledge for collateral margin.
Thanks.
Same question from me ?
Same question here but Zerodha team did not respond to this query since Oct 2020 🙁
I have 10lakhs as cash i account and another 12lakhs as pledged amount in liquid mutual funds.
when i sell options which one will be picked up first .
After pledging, our holdings don’t appear in Holdings. But in Console the current values of the stocks are not updated more than once a day. How do we track the values of our stocks intraday.
Thanks.
hi,
I have one lot hindustan petroleum shares (2700). I want to write a covered call option. Is it possible to hedge the position without maintaining margin?
No, you’ll need margins to place the F&O order.
Hello Nithin,
Have a question:
Can I split my capital as 50% for Bharat Bond and 50% as Liquid bees, pledge both and use it for trading F&O overnight positions
Yes.
Wanted to know what happens to the haircut while the security is pledged. Does the 10% of 1Lakh (10,000) continue to appreciate in value or not?
Yes, it does.
I own 600 petronet stock.
now if i pledge 300 stock out of 600 stock, Cost of pledge= (₹30 + GST)
now after 1 week, if again, i’ll pledge remaining 300 stock, do i have to pay (₹30 + GST) AGAIN??
i understand, you can unpledge scrip in multiple part without any cost, but is this also possible in pledging ?
Yes, you’ll be charged for each pledge request.
i am unable to un-pledge my mutual fund.
Please Help
Sir, If we pledge “money market funds”, is it considered as cash equivalent like Liquidbees or we should maintain 50% cash ?
Can someone please answer this?
Kindly let me know if I can use the collateral margin for mark-to-market losses.
Hello there,
Can I use my Fixed deposits as margins and trade in F & O’s & Equity stocks?
Thanks
Shravan
Suppose I have some shares of reliance and I pledged 5 shares. After some days I bought 5 more shares of reliance and I want to pledge these 5 shares. Do I need to pay charges once again ? Or the charges are fixed ?
Hi,
Can you please let me know why do we have some Regular MFs under the Non-Cash Pledge list but not their Direct plans. For ex. Can Robeco Emerging Equities Fund.
Thanks
Anshuman
Will look into this.
Can I pledge NHAI Bonds – bought last year – Please advise.
You can check the full list of securities available for pledging here.
.
I have query regarding the pledging system, once i pledge the stocks we can take the over night selling positions in options. As per the margin rule only 50% of money can consider from pledging stocks and remain 50% we have to add cash in my trading account.
for remain 50% can i use the liquid bees or debts funds as collateral to selling options without adding money or do we need to add money to trading account ? Please provide your inputs
Supposed I bought 100 shares of xyz company at 500 2 yr back and pledge them for margin. Now 2 months back same company stock around 600 say I buy 50 shares. This 50 shares are in my holding.
Now if I sell 50 shares which shares would be sold one that have been bought at 500 or that which I bought at 600?
on this sell — short term capital gain or long term capital gain ?
in this case — how FIFO apply ?
please answer
Has zerodha started giving FNO margin against sovereign gold bonds?
Hi,
I am facing this issue of inability to pledge Bharat Bond FOF purchased through Coin app despite of it being listed in the securities that can be pledged for margin on zerodha. I purchased this units solely for the purpose of pledging.
I have written to your support and generated multiple tickets regarding this, but till now no acknowledgement received let alone resolution of the issue. I also endeavored to reach your customer care lines which are always busy but never got connected to a executive even after waiting for half an hour or so (multiple times).
This is really not expected from a broker which has received the best startup of year award- keeping your clients in limbo. I humbly request you to help me in this regard, so I could execute my trades accordingly.
Can you please update the list of approved mutual fund list with names of Mutual funds, we are unable to find most of the codes in NSDL website
What will happen if i have 10L worth of equity shares and after pledging those shares i get 5L margin from zerodha and i also have liquid bees worth 5.5L and i also pledge liquid bees, Now after the hair cut i get 5L cash equivalent……..
1) So can i freely trade in f&o with 7.5L (5L from bees and 2.5L from equity, since 50% cash to collateral rule applies) am i right ?
2) Also will the pledging take place according to the LTP, for eg i bought bajaj finance @1800 now its close to 3600 so the haircut of 40% will be applicable to 3600 right??
awaiting your reply
If i pledge 1 lot of shares and do one covered call in that stock, is margin in cash be still required? if so why?
Yes, because the rule says that 50% of the margin is required to be in cash.
Yes, it is based on per request basis irrespective of quantity.
As explained in the article Liquid bees don’t have this rule applicable. Similarly is this 50-50 rule not applicable to Nifty bees too?
Hi Zerodha team, Can i sell my pledged share directly ?
Hi Zerodha team,
I have two questions regarding the Margins:
1. In the approved list of categories GOLDBEES is considered under the cash section? I have taken the GOLDBEES but the pledging option is not available in the console. Please help.
2. I have read that the pledging cost is Rs60 per scrip, can you guys throw some light what does this exactly mean.
For example: I have 30 shares of Reliance If I pledge 28 today I will be charged 60 bucks.
In future if I buy 10 shares of Reliance and then pledge 8 of them, will I be charged again Rs 60? Please clarify .
Dear Zerodha Team,
I have kept my Liquid ETF as a collateral since last 0ne Month. But till time I have not received any interest part anywhere. c an you please let me know when and where I will get that???
Surprisingly, I have raised Ticket for the same query buy Zerodha is not answering it since last week.
There is no use to keep collateral if we dont pay back.
Hi Nithin,
I heard, SEBI updated the new rules and regulation about the pledging and margin process. Is there any article I can refer to and understand.
Check out this post.
can we do positional trade FNO with Liquid bees collateral margin ? or its only for intra day trading?
You can take positional trades too.
Hi,
Suppose in my account I have 20L = 10L cash + 10 L from collateral margin.
And if I take some future position of amount 10L, then will it be from cash first or mix of that.
Also, if I take another 7L future position then do we need to arrange 50% cash or it would be settled with 20L.
Hey, How can we pledge liquid mf worth more than 2 lakh in a scrip?
can we pledge sgb bonds in demat as collateral or not ?
Please add HDFC Overnight fund in your pledge mutual fund list RT only icici overnight available hdfc liquid only available please add overnight fund of hdfc as well
Is goldbees considered as cash component . Can I pledge goldbees to use it as margin in F&O to trade weekly and monthly contracts.
Hi, Nithin..
If I do option writing on MIS and have no cash in my demat account have only pledge margin. Can I affected by 0.5% penalty per day ? thank you…
Hello Sir,
I purchased LIQUIDBEES and i wanted to pledge it for trading. But, unfortunately, the above mentioned options are not available if i check in the holding page. I tried this during market hour and also, after market hour. No luck. Is there any changes in the UI done to pledge? Please support. I could not reach support portal – might be because of the reduced support staff. Appreciate if i get a response. Thank you
@ArulvelRamanan N .. Someone else I know is having same issue (I purchased LIQUIDBEES and i wanted to pledge it for trading. But, unfortunately, the above mentioned options are not available if i check in the holding page) ….
Would like to know if this issue got resolved for you…thanks
I am going for the following trade :-
My aim :- Sell Options and buy a protection.
To able to incur less margin requirement, I do the following:-
(1) Buy an option
(2) Sell an option.
Margin requirement = 60000 (say) for the complete trade.
Now the document about pledging says that you cannot use margin to buy options, so i need to pay say 30000 (say) from the cash. Now for selling options i can use pledged margin, but the requirement is say 150000. So in this case i need 75000 in cash and 75000 can be used from pledged margin. So in effect i need 30000+75000 = 100000 as cash to execute this trade.
OR
i need 30000 as cash to take this trade.
Please clarify.
On holding table option menu as shown above, There is no Pledge option showing for me on any of the stock. . Why is it so? kindly note that all my shares name are in your 1000 securities list.
same with me as well, in fact I have infy and ITC
Hello Sir,
Why I see all of sudden of Available margin as ( Cash+ Collateral ). How to get rid of it. I just want to see only Cash. Please help.
I wanted to pledge NLC which is there in your list but the option for pledging is not there, can you help me out. Also by when will you allow pledging of Bharat Bond?
I have not received the dividend pay outs of my Pledged shares of Hndustan Unilever (HUL) – 50 nos of shares. Though I have already received the dividends in my account on 03rd Jul 2020 for my unpledged shares of same HUL. Pls guide me.
Hi Nitin ,
I just want to know do Zerodha accepts Bharath Bonds or Govt Bonds as collateral.
If so can you kindly know the procedure to accept as collateral in your platform?
Not right now, Saurabh, but soon.
Sir,
why i am not finding option for pledging “SETFNN50” in console.
Because this isn’t on the list of securities accepted by the exchange. Check the list of approved securities in the post above.
Please allow pledging in F groups which consist of debentures
Hey Aditya, we are working on something for this. You should soon be able to pledge a lot more securities. We’ll keep you posted.
I do not see the option for pledging for Bharat Bonds. i.e EBBETF0430-F and EBBETF0430-F.
Will pledging for Bharat Bonds be availble any time soon ?
Hey, Bharat Bond ETF’s are pledgable. However, we see that these aren’t yet settled in your account and are currently under T1 holdings. You can pledge these only after the securities have been credited to your demat account which happens on T+2 days after the purchase. Go through this support article for more.
Hi
can i pledge/collateralize ETFs online. i have ICICINXT50 & SETFNIF50 which is in the list of ETFs eligible for collaterlization. but when i right click against the above in my console/kite, pledge option is not coming.
online pledging is available only for Stock?
You can pledge allowed ETFs too. Please raise a ticket on our Support Portal if you are unable to.
Hii Nitin, I have 5 lakhs of rs in Post Office Monthly Income Scheme can i use it as collateral to get margin at zerodha?
If pledge the liquid bees – what time i need to do ?
timing of Pledging and unpludging timing ?
how long day’s can i pludge the liquid bees ?
1) If i purchase Bharat Bond ETF and Pledge it, will it be considered as Cash component or Equity?
2) If Niftybees (say 10L) is the only Pledged security i have (and no cash or cash equivalent securities) and use it fully to sell options and trade Futures, what is the penalty and where can i track or calculate this penalty?
From the collateral margin can we implement closed Options strategies like,
Bear Call Spread / Bear Put Spreads / Iron condors where for every sold option there is equal number of bought options. Do I need separate cash for purchase of option.
Consider : Collateral margin is received selling liquid bees.
Hello,
Whenever I see to trade a options I see Margin required & Capital required.
Say for example: Capital required is 50K & Margin required is 40K.
So Do I need 90K all together
OR
Only 50K capital is enough?
Thanks,
Trilok
AXISCFDG INF846K01CX4 AXIS LIQUID FUND – DIRECT PLAN – GROWTH OPTION
HLFGTGR INF179KB1HP9 HDFC LIQUID FUND – DIRECT PLAN – GROWTH OPTION
B153GZ INF209K01VA3 ABSL LIQUID FUND – DIRECT PLAN – GROWTH OPTION
IPRU8096 INF109K01Q49 ICICI PRUDENTIAL LIQUID FUND – DIRECT PLAN – GROWTH OPTION
FILFDSIPGP INF090I01JV2 FRANKLIN INDIA LIQUID FUND – DIRECT PLAN – GROWTH OPTION
LFAG-GR INF204K01ZH0 NIPPON INDIA LIQUID FUND – DIRECT PLAN – GROWTH OPTION
IPRU9425 INF109KC1OO2 ICICI PRUDENTIAL OVERNIGHT FUND – DIRECT PLAN – GROWTH OPTION
ICICILIQ INF109KC1KT9 ICICI PRU MF LIQUID ETF
LIQUIDBEES INF732E01037 Nippon India ETF Liquid BeES
this list also considered as cash equivilalent like LIQUIDBEES???
Can anyone please confirm this?
can someone answer ?
Hey Sundar, you can check all the cash equivalent securities listed in this sheet.
Is the margin recieved by pledging liquid funds equivalent to cash as it shows it as liquidbees collateral?
I tried to pledge liquid funds for 2.5L for single instrument HDFC Liquid fund. It is giving the message that you cannot pledge more than 2L for single instrument and getting exceeded by 50K.
Why is this so? It was not mentioned that there would be a limit.
Hey! The pledge limit for online DIS is still in place. You can pledge up to 2L per scrip and 10L overall a day. You can place a pledge request over multiple days to pledge a higher value. We are seeking the depository’s approval to lift this rule.
hi,
i unable to find below ETF/Mutual fund
Security Symbol: LFAG-GR
ISIN: INF204K01ZH0
how i can buy this LFAG-GR.
If it is comes under Mutual fund. how can i pledge?
it is act as cash component like LIQUIDBEES or 50% rule applied?
You can purchase this liquid fund on Coin, our mutual funds platform.
Hi Nitin,
I have liquid bees worth 5 lakh which I want to pledge for writing Nifty options.
Q1. How much additional cash I need to have in zerodha account if I wish to write Nifty options wort 5 lakh ?
Q2. If after a week I close the trade and plan to place another options writting Trade after few days, do I need to unpledge the liquid bees in interim period and again pledge for taking trade or can they be kept pledged ?
Q3. If I keep liquid bees pledged for long time, do they keep generating returns during pledged period or I loose the returns ?
Q4. All the above questions in relation to Liquid Funds- Direct plan as well.
Thank you.
Which are the liquid bees which can be used as liquid bees collateral in zerodha ?
There’s a link to the list in the above post. Check it out.
Hi Team,
I am holding 500 reliance shares pledged on my zerodha account as on 13th May. If I unpledge my request on 14th May record Date will zerodha credit the shares back on the same day and will I be eligible for Rights issue ?
Hi,
Do you consider Bharat Bond as the collateral and if yes is that considered as cash equivalent as Liquidbees.
Thanks
Supposed I bought 100 shares of xyz company at 500 1yr back and pledge them for margin. Now 2 months back same company stock around 600 say I buy 50 shares. This 50 shares are in my holding.
Now if I sell 50 shares which shares would be sold one that have been bought at 500 or that which I bought at 600?
SO FOR NON POA ACCOUNT LIMIT FOR PLEDGING IS 2 LAKH CAN WE USE Online Delivery Instruction CONSENT INSTEAD OF POA FOR PLEDGING ANY AMOUNT > 2 LAKH
No, you will need to submit physical PoA to pledge more than 2L in single request.
instant unpledge is available now?. If not, by when will it be available?
Sir can I pledge hdfc liquid fund (in demate form) as for margin
If you pledge shares on Zerodha the charges levied are Rs 60+taxes. I want to know how long we can keep the shares pledges without any additional charges or penalties. I mean, 3 months, 6months, years etc. Or it can be indefinitely pledged with no extra charges or consequences? Thanks in advance.
Suppose I sell a put option and keep the position overnight. The span and exposure margin is 80k I have around 90k cash equivalent pledged liquid mutual fund in my account. Will there be any extra cash requirement or it will suffice?
Hi Team,
If I invest in 100 shares of liquid bees and wana to opt for pledging.
1. Can I use that collateral amount to trade other ETF’s like bankbees or niftybees or goldbeees for short term?
2. Do I need 50% of cash?
Thanks in advance.
1. You can only take intraday equity trades with pledged margin, not overnight.
2. No, liquidbees are considered cash equivalent.
After I pledge my liquid mutual fund holdings, I find that the holdings in that folio becomes zero. Does it mean that you are transferring the mutual fund holdings to your name? Is it safe, since how can I prove that those mutual fund holdings are only pledged and not sold to you? In short, Please inform whether there is any risk in pledging shares and mutual funds for collateral margin.
Are liquid MF ( for ex: ICICI PRU liquid fund) purchased on the coin platform available for pledging. If so how is this done: through Coin or Kite or console? Further what is the unpledging mechanism. My query is specifically for liquid debt mf shown on zerodha list as equivalent to cash and procured on Coin platform
Hi,
I have pledged 199 units liquidbees. I wanted to pledge 200 units but it was giving an error that I can pledge maximum of 2 lac per instrument. So my question is, is this requirement per pledge request? If I buy 100 units of liquidbees again then can I pledge it or I can pledge total of 2 lac value of liquidbees only?
URGENT – Have purchased ICICI Prudential Liquid Fund – Direct Plan – Growth using COIN with intention of pledging. But cannot see pledge option. Please help to pledge. Also cannot see ISIN number in dashboard of investments in COIN.
Hello.
Suppose I’ve invested & pledged a certain amount in ICICI overnight fund (say, transaction 1). After some time, I decide to invest & pledge certain amount in the same fund (say, transaction 2).
Wanted to know whether I’d have to unpledge the securities from transaction 1 before I can pledge the securities of transaction 2? Or I can pledge the transaction 2 securities just directly?
Anyone?
Sorry, missed your comment. You don’t need to unpledge. You can just pledge the new purchase.
can I pledge nifty bees, if yes i’m not able to pledge since its been more than t+2 days
Hi. i Want to know what are the charges for pledging shares. Also if i sell options worth 2.5-3 lakhs and take overnight position in that so do i also need to have 50 % margin for me funds or i can use full amount of pledge shares.
And does it also same for intraday postion. ?
Also if i buy options intraday than also do i required to maintain 50% margin or again can use full amount of pledge shares.
Every pledge request is charged at Rs. 60. You need 50% cash margin at all times. Any shortfall will lead to a penalty being levied.
What about equity. Do we need margin in that also ?
Yes, but you can only take intraday equity trades using margin. Delivery/BTST trades will need full cash.
When trying to pledge TCS of 250 quantities, it is throwing error that Pledge can not take place more than Rs.2,00,000. Can not understand this error. Nothing described in support.
This would happen if you haven’t submitted your PoA, in which case the limit for pledging per instruction is set at 2lk. If you want to pledge more than that, you’ll have to create multiple pledge requests or send a physical PoA via courier.
according to current scenario if i have to sell one nifty strike of CE 9000 total Margin required is 1,37000 along with that if i bought 9200 CE margin is now 66,700.
My question is which margin i have to maintain now with my collateral (with 50% etf & 50% liquid bees) 1,37000 or 66,700?
and my second question is for buying this 9200 ce i have to transfer some money from my bank account to my trading account equal to the amount required to buy this option this transaction will be free if i have account in IDFC bank ?
Mohit,
You need to maintain Rs 66700 in your account once you have both the positions.
Yes, buying options require cash and you can fund your account using UPI/Netbanking/IMPS/NEFT.
Of the 4 methods mentioned above, only Netbanking transfers are charged at Rs 9+GST, the rest are free of cost.
Yes, if you have an IDFC account, you convert it to a 3 in 1 account and transfers from that account will be free too.
Why has the hair-cut for pledged shares increased dramatically. Initially it used to be 12.5% across the board. Now I see haircut has increased to min. 40% across the board. Why such sudden increase and when will it be brought back to 12.5 %?
Chetan, the haircut is determined by the ‘Value at Risk’. When the market volatility is high, like right now, VaR is higher, so haircut is higher.
When will you start taking mutual funds for pledging as collateral?
I have AXIS FOCUSED 25 FUND (G) nearly 21000 units in my demat account.
Hello,
How to use collateral margin from liquid bees for trading in commodities?
That’s not possible right now. You can only use pledge margin to trade equity and equity index F&O.
I have ₹10 lakhs cash lying in my Equity/FO account.
Can I buy LIQUIDBEES (10% haircut) for Rs 5 lakhs (5 lakhs I keep as cash for emergency over night currency/futures or lot of intraday trading of equity restricting free margin next day ) & use for “intraday” Currency & futures trade margin requiremnt?
Since I wont have any position at the end of the trading day (equity/currency)- will I will be charged any interest if I use the pledged margin collateral ?
Also let us say (with 5 lakh cash) , I trade “intraday” -10 trades or so buy side 5 lakhs -sell side 5 lakhs -no position at the end of the day . what will be my margin available next day ?
Liquidbees collateral is considered to be cash equivalent. You can use this margin to trade derivatives and hold overnight positions without having cash as well since the collateral is considered to be cash equivalent. Interest will not be charged unless your account goes into a debit balance.
In the example you’ve given, you’ll have a margin available of 5L – charges, the next day.
When will you start taking mutual funds for pledging as collateral?
I have AXIS FOCUSED 25 FUND (G) nearly 21000 units in my demat account
Hello Team,
When can we expect to have pledging option for Embassy -RR, please advise.
I can’t see option to pledge SETFNIF50 in kite.
Hello, I have invested & pledged some amount in liquid mutual fund, and wanted to redeem it. So for that, after unpledging it, can I place the redeem order on the same day or do I need to do it the next day? Assuming all this is done before 1 pm.
Anyone?
Hey Sachin, you’ll have to wait for the next day to redeem.
Hi Team,
Pledging option is not available for SBI cards Position, please look into it
SBI Cards isn’t allowed for pledging by the clearing corporations, so you won’t be able to pledge it.
If i pledge 50k liquidbees and will i have to add another 50k cash or its not necessary for liquidbees and what r the charges for pledging as i see its 60-70rs per stock……..so is it monthly or how it works (the charges for pledge ….every month or just once or depends on trade and can u explain with example. thanks
any one who can reply
Sorry, missed your comment. If you have 50k liquidbees, that is considered cash equivalent and you don’t need additional cash margin. The pledge charge is per pledge instruction. If you pledge only once, it’s charged only once.
So, if I pledge liquid bees and trade sell options and fut n number of times……..for 6 months….. I’ll be charged let say 70 rs (for example) only during this 6 months, its not 70 rs every month or 70rs per trade
I hope i get this reply asap, as im thinking of pledging
You will only be charged once for the pledge. The trades will be charged brokerage normally.
Hi,
Can i do option buying for hedging my sold option with liquid bees as collateral or
not .
No, you need cash balance to buy options. Collateral balance will not be enough.
Could I pledge my liquid mutual funds ?? what are the charges ? what is 0.05% interest rate ?
What is the interest on Liquid bees and Nifty bees and what is the frequency of payout?
Dmart has been changed to Dmart -BE..is it removed from the collateral list and the earlier pledged would not give us the collateral limit ?
Hi Nithin
now pledged liquid funds are also considered as cash like liquidBees. is it?
Yes, liquid funds are also considered to be cash equivalent.
Yes.
Does this mean my 50% margin can come from pledging liquid funds and rest 50% from pledging stocks/ other mutual funds?
Pledge/Unpledge button not visible for SETFGOLD-E. I hold 300 scripts but in the holdings/Options Pledge/Unpledge is not displayed. I was able to pledge the same script earlier.
We’re working on this and will fix this shortly. In the meanwhile, please contact our support desk for help.
I have pledged SBI
Am I eligible apply IPO as Existing Shareholder category in case of SBI offers shares in sub-subsidiary which has this special category for existing shareholder ?
Since you’ve pledged your holdings for margin, you will not be able to apply successfully in the shareholders’ category. The RTA will check if you had at least one share of SBI in your demat account as on Feb 18, 2020 in order to mark your application valid in the category.
Ok
If you have enabled liquid fund pledge, is there any plan to enable equity funds also for pledging? Why you are now allowing all kind of MFs?
Hi,
My question is regarding pledging a combination of liquidbees and stocks:
Let’s say I have 100k as liquidbees collateral, 50k as stock collateral and 30k cash in my account. I see that I am entitled to sell options worth 160k total margin. If yes, then why does available cash shows a negative balance even though margin appears as positive and my unrealised profit is positive too? Does that mean I’ll be charged an interest because this number appears negative? Can I safely ignore the number against available cash as long as margin available and total P&L shows positive numbers.
Thanks,
Vaibhav
Hey Vaibhav, you’ll have 180k margin available to trade. This is because liquidbees is considered cash equivalent, and that will balance your 50% cash requirement for the stock collateral. In this case, the available margin wouldn’t be negative until your position requires more than 180k margin. I’ve considered the 50k stock collateral after applying the haircut for simplicity.
I know that 50 % margin for a covered call has to come from cash, but if I’ve pledged say 10 lakhs in Liquid Fund, then I can invest the 9 lakhs (amount after haircut) for the purpose of covered call, right?
Yes.
Nithin,
In your Road map, Any plan to accept Bank Fixed Deposit (FD) or 3rd Party FD as collateral in near future on Zerodha?
Thanks
Ravi
Sir,
I have 400 RELIANCE shares in my DMAT account.
Can I pledge them and buy 100 more reliance as well as sell a OTM option ?
Please guide me
Hey Aditya, you cannot use this collateral margin to buy more shares, here is an article which explains how you can utilize these funds.
I have pledged certain amount of liquid funds and have some cash in the trading account. Where can I see the split up of how much cash is available and how much margin money from pledged liquid fund available at any point?
You can see this on the funds page on Kite.
I bought 2 Nos of LIQUIDBEES and the same is shown as holdings in “Console”. As explained, I tried to pledge the same, but there is no option displayed for pledging in the sub menu. Please help.
You can pledge any of these securities only after they are in your demat account. In your case, you have bought liquidbees on 16/01/2020 which are yet to be settled (the settlement cycle for equity is trading +2 days). The units will hit your demat today and you should be able to pledge it tomorrow.
Following SEBI/Exchange’s instructions, Zerodha has been faithfully/blindly reversing entire cash balance back to bank and also unpledging all the pledged holdings, which I keep to maintain “available margin”. Zerodha applies extra charges, when I bring back the cash to my trading account, and also when I pledge back my liquidbees units, in order to recreate my “available margin’ level. Any ideas, what is the way forward to continue smooth trading. Zerodha Support has not been of any help, other than explaining the Exchange’s rule.
how do we sell a pledged shares on the same day ? otherwise, we have unpledge and wait for a day or two to sell it off
This isn’t possible as of now. However, we’re working on making instant unpledge available in the coming few weeks.
Hi Matti – what is the ETA for this? This will be hugely beneficial for us.
Hi,
Is pledging of Mutual Funds started?
With Zerodha IDFC FIRST Bank 3-in-1 Account can I pledge IDFC First Banks’s Fixed Deposits ?
If i pledge my liquidbess of wroth 1 lakh for margin or collateral. as liquidbess is equivalent to cash,can i use the money for delivery based trade of equity.Is it possibe.
sir,
i bought 100 of indianbulls shares at 750 a year ago and it became longterm holdings now.
and now i bought same indianbulls shares of 100@300 which is short-term holdings and i want to sell only the short term holdings of qty 100@300. pls let me know how?
Hey Vinod, shares are always debited from your account on the First In First Out basis. Therefore, you will not be able to do this. The shares which were purchased initially will move out of your account first.
Hi,
In case of the initially bought shares are pledged then how is it treated ?
1. Bought 100 qty @750 and pledged
2. Bought 100 qty @300 and sold.
The pledged shares aren’t touched.
hi sir;
i have started 25000/month sip in zerodha coin.i would like to know that after year my MF worth will be 3 Lakhs
after that could i pledge my MFs to zerodha for margin?
One more question( my previous question is answered already in the past)
I have 10 quantities of Maruti in DP. Suppose if I pledge 5 nos and average the rest and sell. Will, all the 10 get averaged price wise or the unpledged shares will be averaged as a separate entity? Am I allowed to do this?
Thanks very much for answering this.
Hey Sheena, didn’t get you here. Can you please give a more detailed example? The average price calculation is on a pure FIFO basis excluding intraday transactions. There is no separate calculation for pledged holdings.
I have hdfc life shares in delivery. Can I pledge it and use the same money for trading intraday, including hdfc life?
Thanks
Yes.
Why should there be a charge for pledging my shares; other trading platforms do not charge for this service. I opened an account at Zerodha because your charges seemed low but once I started trading I realised that there are a lot of other hidden charges.
Hi Alka, this is a one-time flat charge of Rs.60. The charge exists because there’s effort, and hence cost associated with the act of pledging.
Please allow overnight funds of all AMCs to pledge with haircut of 10%, as i think they are more secure than liquidfunds.
Any plan for the same?
Will look into the possibility of allowing this.
Hi Nithin/Zerodha team,
What is the plan and ETA for following:
1) allow pledge/un pledge of major debt / equity / balanced mutual funds for margin. Currently only liquid funds are allowed to be pledged.
2) allow pledge of securities for MCX margin.
When are you going to start accepting Bank FDs as collateral ?
This will take some time.
Hi,
I am already using zerodha. I have following doubts and suggestions regarding pledged shares.
1) Can I sell pledged shares directly without unpledging??
2) Suppose I have 500 shares of HDFCBANK shares and I pledged them for margin and I want to do covered calls every month. As now we got rules to settle the stock options physically, What happens if the call I sold becomes ITM?? Will you settle or will you treat this like I don’t have shares shares in my demat account, will you close my call positions 2 days before expiry??
3) The additional units I get for Pledged liquid bees will be credited to my demat or will you add to my pledged liquid bees??
Siva,
1. No, you would have to unpledge the stocks, the stocks will move back to your demat account, after which you can sell them.
2. If your covered calls become ITM, you need to unpledge them on or before the expiry day, and we will deliver the shares to the counterparty. If you fail to unpledge, this will go into short delivery and auction settlement.
3. The additional units will be moved to your demat account. If you wish to, you can pledge them again.
Regarding second point, If i have pledged and doing covered calls. If the option I sold becomes ITM will your risk management team closes the position automatically as I don’t have those shares in my demat account??
Hi,
1) Which are all the liquid funds that zerodha treats equivalent cash.list please.
2) In case option selling, for overnight MTM loss any extra cash required even though you have above enough
collateral margin.
3) why debt fund invested in Coin not considered for collateral, at least 50%?
Hello, i hv another doubt, if i buy for example niftybees and liquidbees 50% each and hold on colleteral then still 50% cash required or it will manage by my liquid bees equivalent to cash.
Pledged liquidbees will act as cash equivalent.
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.
This rule also apply 4 liquid mf or i hv to keep 50%cash??
Anyone plz give answer about liquid mf also equivalent to cash or 50% applicable
Liquid MF is considered cash equivalent and you wouldn’t need 50% cash margin.
I am trying to buy liquid fund from the list of collateral but I can not find any in the kite!! Please help
Also will this liquid MF be treated as cash equivalent or will require additional 50% cash??
Sr. No. Security Symbol ISIN Scheme Name For every Rs 100 worth of stock pledged, you’ll receive collateral margin of Rs.
1 AXISCFDG INF846K01CX4 AXIS LIQUID FUNDDIRECT GROWTH 90
2 HLFGTGR INF179KB1HP9 HDFC LIQUID FUND-DIRECT PLAN-GROWTH OPTION 90
3 B153GZ INF209K01VA3 Aditya Birla Sun Life Liquid Fund – Growth-Direct Plan 90
4 IPRU8096 INF109K01Q49 ICICI Prudential Liquid Fund – Direct Plan – Growth 90
5 FILFDSIPGP INF090I01JV2 Franklin India LiqFund – Super Inst Plan – Direct 90
6 RELLTPDPGP INF204K01ZH0 Reliance Liquid Fund – Direct Growth Plan – Growth Option 90
7 IPRU9425 INF109KC1OO2 ICICI Prudential Overnight Fund Direct Plan Growth 90
Hi Sachin. There are mutual fund schemes. You can buy these on Coin.
Matti, are LIQUID FUND considered as the cash component? or do we need an additional 50% cash?
Why is Nifty 31st Oct options are not displayed on kite zerodha now whereas Nifty 7th Nov options are being displayed. What all weekly options will be displayed in kite zerodha.
Hey Vinay. The weekly contract and monthly contract for the last week are the same. So, you’ll not see an Oct 31 option, but just an Oct option.
Thanks Matti
If I pledged for Rs 1000 and received Rs 900 (assuming Rs 100 gone for haircut); what happens to the haircut money Rs 100. When I un-pledge will I get back the whole Rs 1000 (which includes Rs 100) assuming I made no trades or no losses with the pledged money. If the stock from which I pledged rose 10 % meanwhile, will this 10% get adjusted for the whole Rs 1000 i.e. including haircut money ?
When you pledge a stock, you still own it. So, yes, if the stock rose by 10%, you get back 1100.
How can I cancel my pending please request?
You can go to the holdings page on Console and click on the “…” button on the stock and click on ‘Cancel pledge request’.
Hi Nitin Kamath,
Quote: “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”
Question; Why Zerodha don’t allow to use the margin money received from collateral for Options Buying? because you are allowing for options writing but why not options buying? kindly clarify.
Regards,
Murugan.
When you pledge stocks, you get margin to trade, not actual cash. In order to buy options, you need cash, because the premium paid to buy is credited to the seller.
The option to pledge is not appearing for my holdings
I have read this thread from top to bottom since 2016 and carefully crafted my questions.
1) Time and again (since 2016) it is said that Zerodha is working on instant un-pledging of shares so that they can be sold instantly. Has this been achieved ? Can we now unpledge and sell our stocks instantly since now no IIFL is involved and Zerodha itself is full-fledged demat provider ?
2) Say we are holding a stock Reliance as pledge and we sell call options against our pledged holdings. Now price of reliance rises and we want to close both (position in equity as well as buy back calls).. Can it be achieved (as our holding of reliance is pledged) ?
3) Lets say i have 1 lac stock which i pledge and receive after haircut say 80K and say 10K cash. So total Margin available is 90K. Now i sell a call for which i have margin say 50K and i receive premium of say 10K So total cash becomes 20K (10K my own cash + 10K premium) and margin is 50K for which you need 50% cash i.e. 25K
So will i be charged interest on 25K-20k = 5K or 25K – 10K = 15K on the date of trade.
4) Do you now T+7 or T+2 delivery against margin to place CNC / NRML order to buy equity ?
5) Say i have 10 lac collateral margin and 10K cash. So i sell a Future which results in M2M of 50K so my ledger is in 40K debit by end of day but since i have huge collateral of 10 lac so sufficient margin is there. I understand that i will be charged interest on 40K debit + 25K margin required = 65K but if i don’t have funds to clear debit but have sufficient collateral margin to keep it covered (like in this example 10 lac) is my pledged position or f&o position in danger or will you keep holding it all till i have sufficient collateral margin to cover.
A quick response in this regard is highly appreciated. I opened a new account with Zerodha. I am already trading with other brokers since 15+ years so your replies will help me plan my trades and positions i make at zerodha..
Best Regards,
U.S. Goel
is the Collateral Margin received by pledging Liquid Bees allowed to be used in trading Intraday equity?(as Collateral margin of Liquid Bees considered Cash equivalent)
You can make intraday trades only.
I saw in the list of shares/ETFs for pledging some liquid ETFs other than liquid bees. But when I phoned and asked, I was told it was allowed for some time, but is not allowed now. Please clarify which liquid or debt ETFs or MFs are allowed for pledging now like liquid bees.
Hey Ajit, we currently accept 18 ETF’s and 6 Liquid Mutual Funds as collateral. These instruments are mentioned in the list of approved securities shared above in the blog.
Thank you. I shall try and see. On phone your support team mentioned that only liquidbees is allowed, and other liquid funds stopped for the present.
where can I find the list of shares eligible for pledging?
Mani
Is the pledging of shares is for some specific period,as my shares which I had pledged are now unpledged
Why no reply?
Hey Ramesh, in case the collateral margin hasn’t been used, the shares would have been unpledged as part of quarterly settlement. Read here to know more about quarterly settlement. You can verify the same with the retention statement you must have received on your registered email id on the day the shares were unpledged.
Can HDFC Sensex ETF or ICICI Sensex ETF money be used for margin for trading Futures and Options?
I’m afraid not. Only the securities listed on the sheet mentioned above can be pledged.
Can u please tell us from when we will be able to pledge MF for collateral margins for FnO?
It has been long overdue for more than couple of years now…
Thanks in advance
I have open positions in 2400-CE and 2160-PE of HDFCBANK for September 2019 expiry. The equity of HDFCBANK is due to be split from the face value of Rs.2/- each to Re.1/- each on 19th September 2019 (prior to the contract expiry day of 26th September 2019). The equity price will be adjusted as a result of the split in the face value. How will the option premium and option contract be adjusted?
Hi sir,
Shall we give bank deposits or any other thing as collateral for trading in options.
I’m afraid that’s not possible.
Hi sir. My ID DN0317, I want to pledge the shares of Gencon . But which not listed in your list.
I spoke with your customer care. They are saying t’s management decision. We can’t add from our end.
Kindly add gencon in pledging list It will be beneficial for both of us. In form of capital for me.
Hey Nithy,
the approved scrips for pledge is usually EQ category scrips which are liquid, we do not allow any other category scrips.
can i pledge liquidbees for buying gold mini future, and what is the procedure..
Hey Vinayak,
when you pledge liquidbees, you receive collateral which can be used only in the Equity, F&O and CDS segment. The same cannot be used for MCX segment.
I have pledged shares of HDFC Bank and am using the margin available for taking an overnight position in NSE FO. The shares of HDFC Bank is scheduled to be split up with Ex-date of 19th Sep 2019. Upon split-up of shares will the additional holding be pledged automatically OR once that is credited to my holding I would be required to pledge the shares again?
The split shares will automatically be pledged. You wouldn’t be required to do anything.
Many thanks Matti!
Hi I am a positional option trader, can I get collateral margin if I pladge my liquid bees ?
Means collateral for trading Oprions(over night holding)
For option short selling YES
But not for option buying
Futures (Both buy and short sell ) allowed
Sir
I pledged shares some months ago, I didnt use margins for a long time. Now when I checked there are no pledged stocks. I want to know why my pledged stocks unpledged automatically.
Hi Nitin,
I understood that there is a rule that 50% cash is required to maintain for taking F&O Position.
But that rule is for broker not to traders.
Many other brokers are accepting, 100% collateral , Why not you..
Zerodha is great platform, I don’t want to switch to other, But this rule kills me.
If others are able to do, Why not zerodha ???
If this rule is not there, My returns are tippled.
Double from trading
One more leg from underlying stock
do we need to maintain 50% cash after pledging LIQUIDBEES too?
No, Liquidbees collateral is cash equivalent.
hello sir,
What is the Interest charged if i pledge Liquid bees of Liquid mutal fund to get margin to Trade in F&O
is interest charged only if i do FO Trading by margin from pledging liguid mf or bees?
Interest is charged at 0.05% per day only if you don’t have 50% cash margin available. If you have the required 50% cash margin, no interest is charged.
but Liquid mutual fund are treated as Liquid bees right. still 50% cash margin is required?
Hi Sir , I have few queries related to Stock Pledging. could you please clarify.
1. What if Pledged Stock price goes up or down. will it have impact on Margin given by zerodha ?
2. what is the max validity of Pledged stock ? can I pledge for one year or is there any limit on time ?
3. when I unpledge , the credited stock to my demat account will have market spot value or deviation in that ?
Hi.
1. Margin offered varies in line with the current value of the stock and is revised daily.
2. You can pledge for any amount of time.
3. The value of the stock is always what it is trading at.
Thank you sir for clarification about Pledging and Unpledging.
sir , what will happen if I forget to exit or square off the contract on expiry date.
could you please clarify both cases like F&O BUY and SELL contracts.
The article says,
“Pledging of stocks is a good way to run strategies like covered calls…”
If I pledge the shares equal to the contract size of the call option, do I still need to bring in an additional margin (SPAN + Exposure) to write a call option on the stock?
The risk in the short call option is completely covered by holding (and pledging) shares of the stock.
That wouldn’t be possible. The exchanges mandate that 50% of the margin has to necessarily come from cash.
Hi, where can I see the list of various ETF and liquid bees for which ch you can give colletrol limits
Available here.
Hi Zerodha,
Please let me know if we can pledge NIFTYBEES for collateral. If yes then I bought NIFTYBEES 2 days back and I am not seeing the option to pledge. Please help here.
Hey Mani,
I suppose you have bought the units on Monday and the settlement would be happening today. You will be able to pledge only once the units have got credited in your demat account. You should be able to pledge the units tomorrow.
Can i Pledge my NCD’s from DHFL mainly DHFL NP , DHFL N6 ? IF yes, what the Haircut caluculated on it ?
Can FD in IDFC First Bank be pledged for margin in Zerodha?
Not right now, maybe in the future.
@nithin, any update on pledging of MF ?
I have 157 quantity of Indoco, and i had earlier pledged 52 units. now when i am pledging 105 units (157-52), i get the error message “please enter a valid quanity”. why am i unable to pledge the remaining stock?
There’s doesn’t seem to be any issue with the pledge requests. Could you try again and check?
Can we pledge liquid bees, liquid funds, mutual funds to avail collateral margin?
Any company like DHFL which is pledged at stock price Rs.600 on 03rd march 2018 and suddenly drops to Rs.200 on 03rd oct 2018, with a haircut i may get (80% for suppose) 480 Rupees of margin and stock drops to Rs.200 (still not Unpledged). What will be the effect on the margin taken from you for pledged shares in intraday trading. Will it change day on day basing on current stock price.
Hey Bandana,
Yes, collateral margin is dependent on the price of the stock and will change accordingly day to day. In such cases of extreme volatility, at the discretion of the RMS team, the stock may also be unpledged.
Can u please tell us from when we will be able to pledge MF for collateral margins for FnO.
Thanks in advance
Hey Nikhil, while we are working on this, can’t commit to a time line right now.
I bought Reliance Junior bees on 13th, it has been 2 days but U am nit getting an option to pledge them?
Is pledging not applicable to junior bees ETF?
Are the units delivered to your demat account? You should be able to see the pledge option once the scrip is credited to your demat account on T+2 days.
i have purchased liquidbees (quantity=80) seven days back.
and 3.095 units are already in demat which was delivered as dividend.
(shows as discrepancy 3.095)
so, total 83.095 units are balance.
now, i tried to pledge 80 units but it shows ” failed pledge/unpledge. invalid literal for int() with base 10″
what to do?
please reply
1) Can I pledge MF liquid funds units in COIN pledged, If not what is the timeline?
2) WIll MF liquid funds also have same treatment as cash and LIQUIDBEES?
Hi,
The pledge charges are 60 per scrip. So if i pledge additional quantities of a scrip already pledged, will i be charged on the additional scrips? For example, i pledge 100 shares of Reliance Industries today for which i am charged 60 bucks. If i wish to pledge another 50 shares of RIL a couple of days later, will i be charged another 60 bucks for these 50 shares?
According to SEBI circular dated 21.02.2019, reducing haircut for collateral for government securities, any change in haircut for liquid bees?
This circular has no effect on the haircut for liquidbees.
50% collateral margin plus 50% of LIQUIDBEES can be used ???
or need Cash on trading account???
Yes, you can.
I have 1 lakh in cash and 6 lakhs in margins showing,
my question if I sell the call or put options of F&O and use the margin of say 6 lakhs and carry forward the trade for few days, will there be interest charge from Zerodha.
You can use up to 2 lk of margins without attracting an interest charge. Basically, the non-cash margin you can use is equal to the cash available. Any utilisation above the cash available will attract interest charges.
When will the facility be available for mutual funds units pledging?
Hey Suhas, this is on our list of things to do. We’ll take this live hopefully early next quarter.
When will the facility be available for mutual funds units pledging?
Hey Ganesh, we’re working on this. Should be available soon.
It has been mentioned that 18 percent per Annum interest is applicable if not having 50percent cash . My question is that who receives this interest income.does Zerodha receive this.If yes then is it Zerodha who funds the remaining margin amount to exchange or is there any catch on this.
Yes, Zerodha receives this income since it’s funding the client to the tune of the shortfall in the cash component.
Hi,
I have liquidbees of 10 lakhs. Can i pledge them and use the amount to buy ETFs. If yes can you help me with these questions –
1. What is the interest charged on margin
2. Is there any limit on how long we can pledge the shares.
Arun
No, you can only use this pledge margin to trade F&O.
Hi Nitin,
After pledging of stocks. Will i be able to trade bull put spread (buy option and also sell)?
If i use only pledged amount and no more balance in the account?
You need to have 50% of the margin required in cash to take any position as per exchange regulations.
I am writing options with pledged stocks as margin. How about ‘option buy’ positions as hedge. Is there any way to use the collateral for that.
Hey Kumar,
You can use collateral margins to –
1. Buying and selling futures
2. Selling options
When can we use mutual fund as a collateral margin? Will I be able to use direct plan mutual fund (not regular plan mf) for this. Kindly explain.
Hey Sandeep, just the final few pieces to be put in place before you can start pledging mutual funds. Should be done soon. 🙂 You will be able to pledge direct funds, yes.
Hi,
We are hearing this for last 2 years that it is in final phase and will update soon. Do you have any timeline for this?
We are eagerly waiting for this to happen sooner than later.
Hi,
If i have 1 Lac worth of collateral (pledge equity after haircut) & additional 1 Lac of liquid bees in my account. Can Liquid bees act as part of 50% cash requirement for margin. Or am i to leave idle cash in account. Am i allowed to take position in F&O Option selling worth 2 Lac (span + exposure)?
In case if liquid bees can act as cash component, what about MTM losses, how does MTM settle.
You’ll have to pledge the LiquidBees. The collateral would be cash equivalent, not the holding itself.
About MTM, as long as the collateral margin covers for the SPAN+Exposure requirements, the F&O position will be kept open.
All the MTM losses will be posted to your ledger, and your account will result in a negative balance(interest will be charged at 0.05% a day). If you fail to make good of the debit balance, our RMS team will square-off your pledged holdings to the extent of the debit balance.
Hi,
I am not able to pledge DSP BR Liquid ETF. Is it not in the list of approved scrips.
Thanks
Anshuman
Will pledging more of any security which is already pledged incur additional charges?
For example, if I pledge 100 LiquidBees today and another 100 LiquidBees next week, and unpledge all 200 next month, how much will the total transaction cost me?
Hi @Nithin
I have two questions…
How long can a stock be remain pledged? (By paying only 60 rs+gst) ie 60rs is for one day or for ever; if I want to pledge .
Can we pledge MFs as well? If so then what are the haircuts and charges?
Hi sir,
Can I pledge my bank fixed deposit for option trading in zerodha..
Pls guide
I am having shares of Dwarikesh sugar and I had pledged the same for getting collateral margins.
It is there in the approved list of shares eligible for margins.
But in my account the collateral margins is not being shown and i am unable to sell options.
Best write to support[at]zerodha[dot]com for help, Vipul.
I want to write options (not intraday) using collateral from my equity. So My question is do I need 50% cash to write options or Can I write options using 100% collateral, because some where I read that we can write options using only collateral and no cash has to be maintained. Cash is only required for futures…is that true?
Second question is if 50% cash has to be kept for writing options then Liquidbess is considered as free cash equivalent then is there a need to pledge that liquid bees too or can I simply leave it ,buy liquidbess and leave it in my demat(Assuming it as cash equivalent and no need to pledge)
You’ll need 50% cash component for shorting options. Margin from pledging liquidbees is cash equivalent. As such, you’ll need to pledge to liquidbees.
Any company like DHFL which is pledged at stock price Rs.600 on 03rd march 2018 and suddenly drops to Rs.200 on 03rd oct 2018, with a haircut i may get (80% for suppose) 480 Rupees of margin and stock drops to Rs.200 (still not Unpledged). What will be the effect on the margin taken from you for pledged shares in intraday trading. Will it change day on day basing on current stock price. Let me know if margin provided will be always at current price even if pledged 8 months ago before stock has plunged (i.e., 160 Rupees of margin for DHFL @ Rs.200) for trading now @ Rs.200. or else can i keep 480 rupees that i initially get as margin for pledged shares to take intraday trades.
Would you provide any authorized agreement proof on collateral like shares or liquid bees for pledging that a client’s property was kept with you just like you send contract notes to mailing address of client.
– How Zerodha is progressing on Margin against Mutual Funds / GSECS?
– In this post; couple of years back – it was said that Zerodha will try to give the option to Pledge/unpledge on same day….Any progress in this matter as well?
This is very critical for me to continue using zerodha. I dont like the dividend distribution tax I will have to miss out on LiquidBees. So I’m thinking for very short term Liquid fund Growth, or a short term Gsec, for Cash-Equivalent. Pls give us a timeline on when you can do this, or should we be better off looking for some other brokerage?
Hello Nithin Sir/ zerodha team,
How can I use my bank FD as collateral with my zerodha trading account. Pls reply.
The exchange accepts FD as collateral only if it is in the name of the broker. As such, we don’t allow margins with FD as collateral.
So I can’t write future and options by security deposit FD as collateral from Zerodha. If I can so pls tell me detail procedure, how can i do. I want to do.
I’m afraid that wouldn’t be possible.
My strategy is to buy Nifty in cash in the form of niftybees and sell OTM call on it to make regular income. So please advise me what quantity of niftybees should I buy so that it can be equivalent to one lot (a lot = 75) of OTM Call sold
My strategy is to buy Nifty in cash in the form of niftybees and sell OTM call on it to make regular income. So please advise me what quantity of niftybees should I buy so that it can be equivalent to one lot (a lot = 75) of OTM Call sold. Alos I will pledge my niftybees to take loan for writing the covered call option. How much total investment will be needed to enter into this covered call position using pledging of niftybees? Thanks
¶
Reply
Since a unit of Niftybees is 1/10th of Nifty 50 index, you will need to purchase 750 units of Niftybees.
Yes, you can pledge this and get 90% of the value as collateral with which you can short OTM calls.
As explained in the post above, you need to get 50% in cash and 50% as collateral to not be charged interest for the option short position. Otherwise you can use the full collateral value to take the short option position
Since pledging liquid bees is considered cash equivalent, so can it be used for buying stock or just trading F&O?
Lino, you can trade F&O only
If sell covered call from collateral margin (from pledging same amount of shares as the lot size) and incur unrealized loss, how this is treated. Assuming that I dont have enough free cash to cover the loss, do I need to have cash balance on daily basis so as to cover for losses or is this settled during expiry?
Futures and short options are marked to market daily. Since you have short options, this loss will be reduced from your account and a short margin will be reported. If you fail to add funds, your position will be squared off.
So covered call cannot be done in zerodha? If it can be done then how?
The shares I have pledge will offset the loss of the call sold, if zerodha keeps swuaring off my shares just to maintain M2M then covered call can never be done without extra cash …..
I understand that M2M is maintained for safety but in case of covered call broker doesnt need to do that like i said earlier the shares will offset the loss of the call sold since shares owned n call sold will be of the same quantity… on top of that the profit is decided on expiry day so why do something so meankngless?
Lino, you misunderstood my previous response, you can do a covered call without any issues. We wouldn’t square-off your position as long you have enough collateral margin to cover for the losses.
Actually, since you are selling call options, your MTM losses will go up only if the stock price is going up, hence, your available collateral margin will only increase.
Thanks for clarifying. because of the 50% margin 50% cash rule I thought the collateral shares will be squared off if i don’t have sufficient free cash
Hi Zerodha Team,
We are all waiting for Mutual fund accepted as collateral for some years now.. when will this be enabled? The wait is killing us 🙁
We are facing a few operational limitations with taking this live. We are working towards it
If i trade from collateral margin (from equity pledging) and incur losses, how this is treated. do i need to have cash balance on daily basis so as to cover for losses or this can be settled when unpledging the stocks.
Could colateral margin from Liquidbees be used as cash balance.
1. If your trading account results in a debit balance, you will receive an alert to add funds to your account. If you failed to do so, the pledged shares could be sold to make good of the losses
2. Yes, you can pledge Liquidbees to get collateral margin
Typically how many days does it take for dividend for pledged shares to be deposited to trading account..
For few share in my demat account the dividend was credited to bank account on 19th and for the remaining shares which are pledged I have haven’t received till date(29th Sept)
Typically how many days does it take for zerodha to transfer??
We will soon start accepting mutual funds also to provide collateral margin.
Would you have any timelines for this?
I’m overwhelmed when i see the reply for a feedback from the CEO of Zerodha. Thats really shows your commitment and care for customer service. Thanks a lot Nithin. Hope to see more creative products and services.
After pledging the shares ,will the cash received from Option writing be considered for M2M losses?
The premium received is added to your account on T+1 Day
Does unpledging change the original buying price of the stock? Lets say I have pledged 100 shares @160 Rs.(original buy price) . After some days the price of the share goes up to 180 Rs. If I unpledge it, will the buy price remain 160 Rs? or will it change to 180 Rs?
It remains the same, Krish.
i got shares of sanwaria agro and crest ventures, can i pledge these stocks and use the proceeds for margin at zerodha?
The list of stocks eligible for pledging is available here.
Hello
I was tried to contact on 7406014020 but they does not call pick up from last 2 days. Kindly contact me I want to know about my tread
Rahul Tank
9586869992
hello
I have some query.
1. when i unpledged my shares ,why does it not show me the buy price of it , as it does when they were pledged.
2. If zerodha gets the dividend for pledged shares after unpledging how many days it takes to credit the dividened to the holder’s account and where to check that.
Thanks!
For example if I have Stock A and if I opt to pledge it, will I be able to use it only for equity Future or Option of Stock A only or it can be used for any Equity/Index F&O?
You can use the pledged margin for all F&O trades.
Hi,
Can you please clarify the following items.
Let’s say I get limit of 50k by pledging stocks and keep 50k as cash in the account. Now, I decide to write options in my account and it required margin of 80k.
1. Can I use limit of 50k to write options?
2. Will you charge me any interest on this?
HI
I am trying to pledge some stocks such as Maruti, Biocon etc which shows the “Pledge” icon next to it but nothing happens when I click it. There are other stocks like INFY, JSWSTEEL etc which show me the box for choosing quantity to pledge on clicking.
So what’s happening here. Can the process be made more intuitive for customers.
Thanks
Hmmm… Shouldn’t happen. Can you please try again and tell me if this is persistent?
Hi Nitin,
I plan to invest in Mutual fund in COIN, please confirm I could leverage the same to pledge the MF to do intraday option trades, thanks!!
Does LIQUIDETF (the one from DSP Blackrock) be considered as cash equivalent?
Do I need to pledge that to take the benefit of collateral?
I have pledged liquidbees. Now after the haircut you show the value as cash balance. Now for quarterly settlement of account you again buy (over night) liquidbees and sell it(next day). Now because there is a debit balance for one day you charge interest on the debit balance. The debit arose only because you have bought liquid bees for quarterly settlement of cash. There is no cash balance, but the system shows as cash balance the pledged value of liquidbees. Please do something about this.
Hey Ravi, in such cases, we could refund this charge. Please create a ticket on our support portal and we’ll take care of it. 🙂
I have created a ticket
A request for support has been created and assigned #20180803819641.
After that there is no action for the past one week. Please do the needful at the earliest.
Ravi, will have this escalated
#20180803819641. No action on this ticket even after twelve days. Please look into it .
#20180803819641. No action even after a month.
Hi,
Do you allow NCD (10 year debt instrument from edelweiss ) to be used as collateral for trading in F&O.
Regards
Kiran
Example if i get a 50000 colleteral margin and i have 1000 as free cash can i buy nifty futures, if i buy till what percentage of loss can i hold that position (i know about the debit will be 34000 and interest charges is 0.05%/day).
only thing is that for 1000 free cash can i buy the nifty futures lot and till how many days can i hold that and loss percent for squaring up.
Hi Nitin Sir, wanted to know 2 things:
1. If i Pledge my Shares, apart from F&O positions, can i also take Intraday & Delivery Positions in the Equity Shares using the Margin Available?
2. If i have Shares in my account, which are in F&O, what is process for lending those shares through zerodha?
Please do help me with the same.
Thank You
Hi,
My previous broker was allowing me to take equity delivery positions for 3 to 5 days based on my DP stock balance. When will this be introduced by Zerodha? I know I can pledge and take intra-day positions with Zerodha but what about delivery? I last checked this with your customer care in July 2017 and they said it would take couple of months.
Honey
Hi,
I spoke to the zerodha helpline. People there dont seem to have the answer to this question. I have got 3 conflicting answers.
My question is this.
I already have an existing position in futures. I pledge my shares today. After I pledge, on T+1 the pledge amount shows up in the collateral section on kite.
1) Will the collateral be used automatically for the existing position that I have? As in, will kite understand that this account has a futures position and now that there is a collateral amount available, kite should utilize that amount to pay 50% of the margin?
2) If the answer to the above question is NO. Then what am i supposed to do to get kite/zerodha/pi to use the collateral account for payment of the margin?
a) One person told me that I would have to sell my position (its a long position), and then re-buy it immediately for the collateral amount to be used for margin payment
b) One person told me that if i sell and buy back immediately, it would count as an intraday trade, and zerodha/kite/pi would not pick up 50% of the margin from my collateral. Hence i would have to square off my position today, and re-enter it tomorrow?
3) Can i change expiry? I have a position in july futures, if i want the margin to come from the collateral account, can i square off my july futures, and take a position in the next second in august futures? will 50% of the margin in this case be taken from my collateral account or will it still be an issue?
Why does this mechanism exist? is it for brokerage collection? i dont mind paying you the brokerage AT ALL as long as I can do my trades quickly without having to square off today and re-buy tomorrow. Hell, debit my account for brokerage if you must :P, i dont mind in the least. I am more worried about the potential price differential between close today and open tomorrow because my position is considerably large in reasonably volatile scrips that have the potential to open 7-15 rs up or down the next day.
Hey Firoj. The system doesn’t really differentiate between cash and collateral like that. When you add collateral to your account, the total margin available increases. Only if the positions you have cannot be covered by the cash and collateral available in your account with cash making up at least 50%, then a penalty is charged. That’s just about it. 🙂
I have shares of reliance capital that i would like to pledge. Lets assume that I pledge 1000 shares at the price of 368. That frees up 3,68,000 out of which you take a haircut. lets assume the haircut is 20%, which means i get 2,94,400.
I can use the 2,94,400 ALONG with the cash in my account to take a position in futures of reliance. At a price of ~990 currently, the margin required is ~1,24,000. Now lets assume i want to purchase 4 lots. Which means my margin requirement is 4,96,000. I have FREE CASH in my account. So 2,48,000 will be taken from my FREE cash in the account. and the remaining 2,48,000 will be taken from the collateral account.
My question is this. When the price of reliance capital starts reducing, the collateral account will reflect those changes as well. Correct? At a price of 300, the 1000 pledged shares will have a value of only 2,40,000. Which means that this goes below the amount that has been previously used for the 50% margin above (which is 2,48,000). What happens here? Lets assume that i have plenty of cash in the account. I have another lakh or so more FREE cash in the account as well.
After the price of relcap drops low enough that it doesnt even account for the 50% margin in the account, will my cash be used to make up the pending margin? will i be penalised?
Hey Firoz, as long as you have sufficient cash, there is no issue. Penalties are only levied if the margin contribution for your position is more than 50% comprised of the pledged margin. In your case, even when the share price drops since you have enough cash to maintain the position, this cash margin is consumed. In this case, your margin is more than 50% cash, so this would work fine.
Hi Nitin & Team,
Could you pl. confirm on pledging of MF? By when(best and worst case) can we expect the MF pledging will start in Zerodha. The timeline helps us to plan the alternative for MF pledging.
This is very important, Nithin…If not all MFs then atleast ELSS, which are out of 3 year lock-in + Growth funds could be part of this pledging…
Please consider…
Thanks much,
Dheeraj
This is in our things to do. We expect it to go live within a month 🙂
This is an awesome news…worth waiting I believe…:)
Hi Zerodha folks, is this done, please confirm, thanks!!
Hi Team,
We are nearing a month since we got response from your team that it will go-live within a month…just a gentle reminder to ensure that we are on track…
Thanks,
Dheeraj
Still awaiting to make MFs & even bank FDs eligible for pledging?
Dear Sir,
Can Mutual Funds in Coin platform be used as collateral?
I have been informed that dividend for the pledged stocks will be credited in trading account instead of bank account.
1)Kindly confirm the same.
2)Also, within how many days will dividend be credited in trading ledger ?
3) What will be the description in trading ledger ? how can I audit if previous dividend for my pledged stocks has been credited ?
You have mentioned share pledging cost is RS. 60 per script.
Suppose, I have 10 shares of Maruti RightNow. Hence pledged all 10 for which u charge RS 60.
After one week I am going to buy 5 more share of Maruti which will reflects in my DP on 7th day.
Now I want to pledge that 5 shares again. It means total share pledged is 15.
Will u charge RS 60 additionally for 5 share again?
Or, per script includes all additional share pledged and u will not charge more??
Hey Nagendra, it’s Rs. 60 per pledge instruction, so you’d be charged twice.
No where mentioned “per pledge”.
Read Rule:
“The entire process of pledging and unpledging will cost Rs 60 per scrip irrespective of the quantity”.
It is clearly mentioned “per script”. it means they don’t have to charge again for same script.
Correct me if I’m wrong. The post says “The entire process of pledging and unpledging will cost Rs 60 per scrip irrespective of the quantity“. This doesn’t really say it’s per scrip. In the response to the other comment that you’re referring to is clarifying that if one pledges more than one scrip at a time, then the pledge request charge is applicable to each scrip irrespective of how many stocks of each are being pledged. Each time you place a pledge request, it’s a fresh request and is charged accordingly.
Hi Nithin & Team,
You guys are doing a phenomenal job and congrats for becoming the 3rd largest stock broker in India. I am happy with your services. I would like to know when your team can start allowing pledging of mutual funds for getting F&O margin. Eagerly waiting for your reply.
Thanks..
Rajesh
Hey Rajesh, this will take more time, we will have to accept only growth funds as dividends/lock in funds etc aren’t possible. We can’t give you a date yet, but the good news is that we are about to launch the new Q finally, so hopefully much sooner than later.
Sir/Madam, I am working with Varroc Group since 17 years. Now presently our company is going to be listed in stock exchange and it is in process. Our employer is offering its employees to apply for discounted rates in IPO. Our group has appointed Kotak Securities as a channel partner for applying for IPO. When i disclosed that I am having an demat account with Zerodha i was told that IPO cannot be applied thru Zerodha directly instead we have to apply thru ASBA service. Now my question is how to apply for IPO for my employer @discounted rates after I share my Zerodha DP ID with my employer. Whether I am eligible to get the shares allotment and how this transaction would take place. what is the procedure to follow as Kotak representatives have already filled up forms from Varroc Group employees for creating their demat account. Whether I too have to open a Kotak account or i am eligible to apply for IPO with the Zerodha platform if I share my DP ID with them. Pl confirm at the earliest.
i am having account from you. Can i have collateral margin from my mutual fund??
Not as of now, Sritharan, but we do plan to make this option available to you.
HI @Nithin
We all are waiting for this answer from last 2 years about Collateral Margin against mutual funds Units.
Please let us know when it ll start. just dont tell it ll start soon.
or is there any difficulty in this being lunched plz let us know
Can we get margin on Reliance Junior BeEs after pledging ?
Yes, check the list of stocks with applicable haircut above to know more.
Hello ,
Could you please let me know if we get collateral by pledging ICICINIFTY ETF and KOTAKNIFTY ETF . These are not included in the excel list. What is haircut for these ETFs
Thanks,
DeepWater
Can i take a loan against my MF holdings in Coin platform. The loan is for other personal purposes, not for trading.
Hello Nitin,
I have few questions regarding this facility:
1. If there is some negative balance then only there will be interest otherwise no charges on using 50% collateral for longer period, correct, means if I hold a F&O position for 2-3 month or more than 1 year with 50% cash from my side then I dont need to pay any additional money to Zerodha, am I correct?
2. Suppose for any stock, I have requested for some quantity for example: 200 as collateral and later I increase/decrease the quantity, Will I have to pay 60 + GST everytime?
hi nitin,
would like u request u to start taking collateral fd in f/o segment instead of cash or nifty bees. it wil give additional return to trader like us.
If I have liquidbees pledged for 1lac amount and do not have any cash in the account. Would I be able to take the options writing to next day carry forward?
Yes, you can.
Do we get any notification when pledging actually executed? Small action in Q for big decision. It would be better if we get the email notification with quantity and amount of margin added due to pledging. Last time when I tested by pledging, i never came to know if the stock is actually pledged, or pledging charge really charged or margin really increased. Does pledged quantity been shown as T1 quantity in Holding API?
If Q provided some indicator to show pledging status like with icon for COMPLETED, REQUESTED, INPROCCES , that would also solve the purpose.
This is being added in the new Q currently being built, Jagan.
Thanks for reply, Some more questions..
Since stocks will be removed from d-mat, once we pledge, which makes sense to get more right to pledged stocks which they need in extreme cases. But dividend will be credited to zerodha instead of original owner.
Can you please explain how these dividend money will be transfered to original owner of the stock .
After pledging Stock, customer need to get contract notes or any formal pledging document else broker will be legal owner of pledged stocks . Even though customer has +85% of money in their account, as margin which is NOT really customer’s money. I really find the need of some official contract document which can be used legally.
Hey Jagan. The dividend is credited to Zerodha by the company. This is in turn credited to your trading account by us. As for the ownership of the stocks, we display these stocks as pledged stocks in the backoffice, which should be proof enough.
Matti, We trust Zerodha. please understand customer may want to play safe. Financial dealing usually won’t be done based on mutual trust. keeping integrity in extreme critical situations is almost impossible. After so many frouds from banks and very famous personalities are talking the news headlines, it makes sence to be cautious, when we plan to pledge more stocks. Company-customer relations need be same always. World’s most pupular email service provider said “Their customers don’t expect privacy of their email content”. Simple leagual e-document is suffient, Most of the customers may not even keep the copy of it, but that gives feel of safety.
Hi Nitin,
Pls help me understand the use of liquid bees & pledged stock collateral in the below scenario:
1) Margin requirement is 1 lac & I have pledged 50 k of liquid bees & 50 k of stock. Can i execute a trade of 1lac margin requirement.If yes will i have to sell off the liquid bees to provide zerodha actual cash or I can keep the liquid bees pledged as collateral & earn interest on the same as well. I believe the interest would be only payable if i do not provide with the MTM margin
2) If i have pledged 1 lac liquid bees & 2 lac worth of stock. Need to do a trade on 1 lac margin on day 1, whether my liquid bee balance would be utilized or it would be a equal proportion of liquid bee & stock.
Hey Nilay, pledged liquid bees are cash equivalent. So, if you have 50k worth liquid bees collateral, and 50k work stock collateral, you can take a trade worth 100k. If you have 100k worth liquid bees collateral, and 200k worth stock collateral, you can take a trade of up to 200k without having to pay any interest for margin shortfall. In this case, 100k of the liquid bees collateral and 100k of the stock collateral is used. To utilise the rest of the pledged stock, you’ll need to bring in 100k cash or pledge equal liquid bees.
How do can I differentiate or know the status of collateral available due to stock and liquid bees .. Is there separate heading under which these are differentiated. I want to separately know collateral available. In the above example. If I have stock collateral of 1 lakh , liquid bees collateral of 1 lakh and utilities 1.5 lakh margin.. I want separately know 25 k of liquid bees and 25 stock collateral available.. Do I get this info from q or kite ?
That wouldn’t be possible. The system will always try to use 50% of the margin from cash/liquidbees collateral and the other 50% from stock collateral.
Hi, I see the approved list is composed mostly of stocks and stock like etfs and few short-term debt like etf. Can one pledge indian government bonds /bills? If yes, where one can find relevant haircuts. One would presume being the safest of short-term debts, Indian government bonds/bills especially of short-term maturities would qualify;
Hey Abhi, for now, only the securities listed in the list above can be pledged.
Hi Team,
I have come across below news that Zerodha has got the lending license, which could help to provide the collateral margin again mutual funds also. Is it true? If yes, how soon we can expect the Pledging against the mutual funds.
http://www.adigitalblogger.com/trading/industry-updates/zerodha-lending-license/
Thanks
Tirupathi
That’s right, we should start offering this soon.
Hi Matti,
Any update on the progress of providing mutual funds pledging option. I have hearing that it will be soon from almost 2 years now. I have been keep waiting for this to happen and no luck till now.
Could you please provide any timelines, if I not we can plan alternativies if it is gonna take more time.
How can we track our pledged liquidbees return?
I have noted that whenever the returns cumulates to a whole unit it is getting credited in our account at the end of the month. But I want to know what happens to the fractional units when we unpledged. I recently unpledged my liquidbees portfolio but I didn’t get any fractional units, and it is highly unlikely that there are no fractional units as it is a daily dividend scheme. Kindly guide.
Thanks
The fractional units will not be shown on the trading platform as they can’t be sold from the platform but will be available in your demat account. You can redeem this. The process is explained here.
kindly provide the list of stocks which are allowed for intraday/MIS trading in Zerodha platform.
You can trade all stocks using MIS except for those on this list.
My wife and I have formed a LLP. We will be opening a trading cum dmat account under the LLP name. I would like to know if shares in our individual names can be used for the purpose of margin against shares (maintaining the stock – cash ratio of 50:50). I am 99% partner while my wife is 1% partner.
Sir,
My ID ZP6251, i had purchased a stock as CNC named SRDL some weeks back, now the same is not reflecting in nseindia.com and other platform, on the other hand i am not able to sell the same in open market. as i find this as dead stock with no buyers and sellers , and the value of the same is decreasing day by day. can you please help me get rid of this stock? kindly help its an request
Hi Nithin and Team,
Would you like to consider FDR for margin in FnO? I see that exchange allows for it. I wonder if you would like to provide that facility
Thanks,
i am re-posting it again!!
can someone answer the querry
tried calling the branch office at pune but hey couldn’t resolve it
i wanted to check how much margin do i have if i pledge my stocks. So i tried pledging and checked the amount for few scripts. Then i again un-pledged them after checking the amount which i can use as margin. i hope with this action of mine i am not charged with 120/- per script.
thank you.
Haircut is 80-85%. So you will get that much of pledged value back in your trading account. Actual haircut varies because different stocks have different volatility
I have Equity collateral (Pledged stocks in my DP) of 23 Lakhs. I have used margin of 11 Lakhs for taking positions in stock futures. Now after some loss in the positions I am holding, my cash margin got almost wiped out for M2M losses. If the Cash gets short of covering the M2M losses, and I have a lot more margin in Collateral….Still will your RMS square off my positions if M2M is in loss? or will you charge me interest on the shortage of cash for M2M. Please let me know.
The rule is that 50% of the margin should be in the form of cash. If there’s no cash available, interest is charged. If your cash is completely wiped out, then a part of your pledged holdings are liquidated to maintain the position. This, however, can only be done up to the extent of SPAN margin. If the collateral you have is less than the exchange stipulated SPAN margin, then the position is squared off. In case of extreme volatility, you’d require to have exposure margin as well to maintain the position.
Who decides the percentage of haircut .Does it decided by broker or the list is available on NSE website which is same for all..Can you throw some light on this ?
i wanted to check how much margin do i have if i pledge my stocks. So i tried pledging and checked the amount for few scripts. Then i again un-pledged them after checking the amount which i can use as margin. i hope with this action of mine i am not charged with 120/- per script.
thank you.
How to check charges of interest , on delayed payment ??
You can view the daily breakup under Holdings in Q (View delayed payment (interest) charges). The interest is charged at the end of every month.
Hi Team,
I am not able to see pledged stock in NSDL statement. May I know, why these are not visible in NSDL statement.
I have pledged stock from HDFC security to get margine. However, these stocks are visible in NSDL statment.
Please help me to understand it.
Regards,
Kundan
When will the instance margin available, by pledging shares or ETF
Hey Rahul, once the pledge request is processed, you’ll receive margins. Takes 1 working day.
Why is haircut taken even on Liquid Bees when the exchange stipulates that it is as good as cash ??
hi nithin sir,
i am new to this sharemarket
By mistake i selected the buy overnight liquid fund option , please tell me sir
how to deselect this option i dont want this
by mistake i selected the buy overnight liquid fund , please tell me how to deselect this option i dont want this
Please answer my queries. I am reposting my questions that I have asked on 04th Jan 18.
Two Questions:
1. I have pledged nearly half of my Piramal Enterprises share holding with you for trading in F&O margin purpose. Now PEL is coming up with Rights issue. I want to subscribe for the rights they offer. Now as these stocks are pledged with you. Will there be any effect of this pledge on the rights issue? Will the rights issue on the pledged shares be offered to me or not. Please explain if there is going to be any change in the process that will be followed for Pledged shares when rights issues are offered? Please let me know if I should un-pledge the shares before the Record date for the rights issue?
2. Is Zerodha facilitating “Rights issue” purchases like they do in “buybacks” or we have to do it manually on our own.? please explain.
Thank you.
Hi Can I use margin for FNO trading from the Mutual Funds I hold? When this will be available?
We’re working on the pledging of mutual funds, should be available soon.
Posting again as I did not receive reply:
I have 1 lac of liquid bees, 1 lac of shares and very little cash say 20000.
If I pledge 1 lac of shares and 1 lac of liquid bees, can I use total margin of 2 lac (after haircut) without paying any penalty / interest for buying future or selling options?
I have couple of equity’s in. My demat for Hdfc securities .can I pledge it for trading in Fontana of Zerodha account
Nitin sir,
Right now I hv account with angel brorcking but having high charges like 45 rs per lot of nifty option….The margin required for option writing at current nifty price of 10650 or 10700 CE call option is Rs 7000 and for current Bank nifty price for option writing the margin required is 8000 Rs……I tried to calculate the span margin calculator for zerodha margin required for option writing but I didnt get the answer…..Pls let me know how much margin is required for option writing for both Call and Put at current nifty and bank nifty price…..Pls let me know the approx amount of margin req,,,,, I hope it will be less than angel brocking.
The margin required for one lot of Nifty is about Rs. 55k for overnight positions and 22k for intraday positions.
Dear Nithin
Please let me know when can I expect the pledging of Mutual fund units.
I am planning to buy MF on coin platform only if pledging is allowed.
It will be highly appreciable, If you can give an approximate timeline in days/weeks/months/years so that I can plan accordingly.
Dear Zerodha Team
I am also seeking answer to same question.
Please tell whether it will be a reality in near future…….? Collateral margin against mutual fund units..????
I wanted to pledge all my holdings after ticking and filling up the quantity is there something else to be done as the screen is not shaowing acceptance.
How much interest rate will be charged on collateral amount?
For overnight FNO positions 50% cash margin is required (other 50% being collateral). For intraday FNO positions can I use 100% margin from collateral without interest. If it is squared off within intrady.
Yes, you can.
Two Questions:
1. I have pledged nearly half of my Piramal Enterprises share holding with you for trading in F&O margin purpose. Now PEL is coming up with Rights issue. I want to subscribe for the rights they offer. Now as these stocks are pledged with you. Will there be any effect of this pledge on the rights issue? Will the rights issue on the pledged shares be offered to me or not. Please explain if there is going to be any change in the process that will be followed for Pledged shares when rights issues are offered? Please let me know if I should un-pledge the shares before the Record date for the rights issue?
2. Is Zerodha facilitating “Rights issue” purchases like they do in “buybacks” or we have to do it manually on our own.? please explain.
Thank you.
Kindly reply
dear sir
try to explain in easy form,, my stock holding has a pledge sign i can’t understand ,, plz
When will you allow pledging of mutual funds? What’s the timeline for getting this feature in Zerodha? I keep hearing it will take some time for the past 2 years. Can you be more specific?
Hi,
“For overnight F&O positions, 50% of the margin needs to compulsorily come in cash”.
Need clarity how the word margin is defined?
Here 50% of the margin means “50% of the SPAN margin” or ” 50% of the Total margin (SPAN+Exposure)” ?
For example,The margin calculator says :
SPAN Margin : Rs 50000
Exposure Margin : Rs 50000
Total Margin : Rs 100000
Here, 50% of the margin in cash means Rs 25000 (50% of SPAN Margin) OR Rs 50000 (50% of Total Margin)
You’ll need 50% of the total margin required in cash, which means you’ll need 50k cash in your example.
Thanks….
Dear Nitin,
Can cash (received by pledging liquid bees) be used for buying Mutual fund schemes available on coin.
While the margin obtained from pledging liquidbees is cash equivalent, it isn’t actual cash and cannot be used for MF purchases.
Hi Nitin,
I wanted some clarification on Margin against shares.
So as a family we mutually decided that all long term investments would be done on my parents name. And all short term trading activities would be done in my name. But in this scenario what is happening is all the long term stocks we have are held in my parents name and I have to give cash for margin / m2m. So in which scenario would I be allowed to use my parent’s shares and get margin against the same. I am aware that 50% of margin has to be funded in cash or cash equivalent. In both my dad’s and my mother’s case, theirs is the first name and mine is the second name. So if I open a joint account but with my name as first and their name as second, would I be able to use their shares for margin ?
Yes, if the demat accounts is jointly held, this can be done.
when can we get margins agains MFs?
Regards
how to use margin for intaday equity market.margin is available for intraday or not.iam bid confused with these pledging .can u explain me where we can use margin how it can be applied for equity intraday
You can use the pledged margin for intraday trades. Simply place the trades and they should go through.
I have 1 lac of liquid bees, 1 lac of shares and very little cash say 20000.
If I pledge 1 lac of shares and 1 lac of liquid bees, can I use total margin of 2 lac (after haircut) without paying any penalty / interest for buying future or selling options?
Do you accept collateral such as NHAI bonds which are there in NSE pledgable list and also traded on nse
There’s a list of approved securities that are accepted for pledging at Zerodha in the post above. I suggest you check it out.
Hi
I have X quantity of a stock already pledged. I would like to pledge more of the same stock. As the Pledge charge is per script, will i have to pay 60 rs additional to pledge more shares ?
Thanks
yes
Can you answer my question “Do the pledged Liquid Bees treated as cash margin for F&O trade?”
Yes.
I have X amount of margin against pledged shares,if I buy equivalent amount of liquidbees ,as 50% cash margin Then do I have to pledge them for cash margin or just keep in my equity portfolio.
Liquidbees will have to be pledged too.
Hello sir.I linked aadhar for my account.my friend have one account.by mistake I linked my aadhar for him account..how do identify in which account linked my aadhar.and how do unlinked aadhar for my friend account
Thathabeer, can you write to [email protected].
Do the pledged Liquid Bees treated as cash margin for F&O trade?
How do I buy liquid bees from surplus fund and pledge them?
You can buy liquidbees as you buy any other stock on Kite and then pledge form Q.
“We will soon start accepting mutual funds also to provide collateral margin.”
May I ask if you have already begun accepting mutual funds to provide collateral margin ?
Not yet. Should start of in a few weeks now.
Did it start yet.?
Is this started? I mean can I use Mutual fund to pledge and get margin for trading?
Is it started yet? In one of your other posts, you were referring to the practical problems of dealing with dividends, closed ended funds etc. To begin with why dont we keep it simple and just accept open ended & growth option mutual fund holdings? Why delay the whole concept because of complex cases. Request u to start accepting simple cases as I mentioned. Regards
What is the need for maintaining 50% cash margin to maintain a covered call position. Any adverse movement in the option is 100% captured by the underlying equity ? Please clarify
This is an exchange regulation. You can’t trade with only pledged margin.
Thanks Nithin/Venu, you guys are doing a great job.
I wanted to understand the situation when i need to immediately sell my pledged script units.
What option do i have and how do i go about it.
I could only gather that -> unpledge today (before 2.00pm) and sell tomorrow.
Would it be possible to sell today and unpledge request given today (before 2.00 pm) or tomorrow (since cutoff is 2.00pm itself)
Also it would improve my confidence, if overall procedure to buy script and pledge(5 days) and unpledge requests (1-2 days) time is shortened somehow.
We’re working on this, but this real-time pledging/unpledging will take some time. The current, vendor backoffice we use doesn’t support this.
Hi Harpreet & Matti,
I have thought of a workaround on this issue specially when dealing with covered call and underlying is pledged. Kindly update me if I m wrong somewhere. Suppose I have 1000 reliance shares and are pledged together with a covered call. At some point if I want to exit both the position, I will exit covered call together with selling one lot of reliance future ( current series or even next series). Then we can unpledge the shares and then square off both the shares & short future position. It may also happen that prices goes down considerably and we only square off the short position only and keep the shares in holding. Maximum loss may be one or two point in the price and transaction cost which is any way very less.
Hi Nithin/Venu,
I need a clarification over position after pledging shares.
Instance:
Pledged shares worth 10 lakh.
Trading Margin availability (after 10% haircut) is 9 lakh which we call it collateral amount.
Now as per SEBI guidelines our any position must have 50% cash & 50% collateral amount. It means maximum position limit would be 18 lakh (50% cash- 9 lakh & 50% collateral- 9 lakh). If I have 9 lakh in cash then no interest charged and in case if I have no cash then 9 lakh margin will be provided by Zerodha with .05% interest per day which in this case would be Rs. 450 (.05% of 9L) per day. Correct?
My another question is, if I have taken position of 18 Lakh (9 lakh cash & 9 lakh collateral), what should be my cash amount (span & exposure) to carry option position till expiry date?
Yes, if you’re getting 9 lk collateral margin, you can take positions up to 18 lk by bringing in 9 lk cash. Also, any cash shortfall will attract interest charges of 0.05% per day. The margin required to maintain a position itself isn’t differentiated between cash and collateral. As long as you have margin available, you can take and maintain a position.
Hi Matti, I want further clarification at what point you start selling pledged shares or shares in the holding.
Nitin, How abt body fat %, how much you have reduced ? 😀
Zerodha, You are charging very high cost Rs. 60 per stock Pledge the stock for Margin. This margin mostly available for free in all other trading terminals.
Zerodha have many and many hidden charges it never tells to us on opening of account.
Hey Lokesh, we take pride in being completely transparent about our charges. Not only has the cost been put up here, on a public forum, but it is also mentioned in the tariff sheet in the account opening form itself. If there are businesses not charging for pledging/unpledging, this would be because they more than make up for it in the brokerage you pay.
Hi Nitin, When you are going to start pledging of Mutual Funds ?
We are working on it but will take some time. We’ll keep you posted.
Hello,
Can we apply for IPO through zerodha?? is this facility added? or if not , any plan??
Thanks
Ganesh
i am not able to pledge my shares of Jain irrigation and Engineers India. tried thrice but no margin has been credited and pledged holdings are still not updated.
Can I have 50% margin as niftybees and 50% as liquidbees?
As you have mentioned in the instructions, that we can pledge shares to take further positions in Equity segment. Wanted to understand what is the risk to Zerodha if they provide us margin after a haircut of 50% which is as per RBI regulations. Further, other market players are also providing this facility like Kotak, Edelweiss to name few. By daily collateral valuation monitoring, value of pledged shares can be checked accordingly available margin can be varied and in case of a breach, margin call can be made.
Tushar, you can take positions only in F&O and not equity. SEBI mandates that only 50% of that can be brought via collateral margin and the rest has to be brought via cash. And yes, our RMS desk constantly monitors these positions if your total account balance falls below 50%.
hi,
my question is that if i have pledged my stock than can i place stop loss on that stock or sell it because settlement in DPs take T+2 days.
If you have pledged a stock you cannot sell it hence you cannot place an SL.
Any PE or CE Option can be carried till the expiry of the current month (when bought through collateral margin).
Please tell me whether this is TRUE or FALSE?
Palash, 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. Assuming that you have enough margin, you can hold the position till expiry.
Hi,
Any update on pledging of mutual fund….???
Bhaskar, we are working on it but will take some more time.
Mr.Zerodha, its been long time to make Pledging & unpledging instant in action but no update is there. It is very unrealistic & trading in FnO future using the demat holding is still risky! Plz come in with good news.
Can I use the money which I shall receive after shortselling
Hi
can I use the proceeds received by short selling in slb by borrowing the stock
Hey Harsh, can you elaborate your query, please?
If I pledge smallcase stocks how can I rebalance it?
KM, you will have to unpledge and then rebalance.
how to open slb account can you tell me ? and what procedure of its ? and what documents provide ? and what is eligibility for this ?
Sure, we’ll help you out. Could you let me know the stocks you hold that you wish to lend?
Still awaiting MF pledging….How’s the progress on that?
Some more time away.
Hi Nithin,
Any timelines you have planed to start the pledge on MF?
We are eagarly waiting for it to start.
Tirupathi, we are working on but will take some time. We’ll keep you posted.
Hi,
A few queries on pledging.
1. The blog states that 50% margin for FnO should be in cash and any shortfall will be charged interest. Is this rule still applicable since I believe ICICI Direct does not have such requirement.
2. The blog also states that pledging and unpledging is not immediate and takes 1-2 working days. Is this too still applicable. I have an account with ICICI Direct and both these activities are immediate.
Regards,
Yogesh
1.hmm.. maybe they are covering this interest cost as they charge higher for trades. Do check your ledger for all charges once though.
2. We are working on making this instant soon.
Hello Nithin/Venu
Could you please clarify
The situation is
1. I have pledged stocks worth 1 lakh , after the haircut I received a collateral Margin of 80000
2. I have some cash say 1lakh.
3. I buy the Nifty future,
Can , i know how the following in kite GUI
1. Amount of cash available after taking the Future
a. I wanted to know like 70 k more is available in cash
2. Amount of collateral available
a . I wanted to know like 50 k is available in Collateral
3. Total Margin available (Sum of above).
This would be helpful in taking new positions and also know the exact debt / cash Available for any more Positions.
If the above information is already available in Kite. Please help me finding the remaining cash and remaining Collateral margin available for next positions in the below example.
MARGIN AVAILABLE 72,336.74
MARGIN USED 83,913.13
TOTAL ACCOUNT VALUE 84,792.66
EQUITY
PAYIN 0
SPAN 38,421.5
REALISED PROFIT 0
UNREALISED PROFIT 0
ADHOC MARGIN 0
EXPOSURE 45,491.63
COLLATERAL 71,457.21
OPTIONS PREMIUM 0
Thanks,
DeepWater
Haven’t understood your question clearly, however to clarify, you can take a future/short option position for margins upto (Cash+Collateral). At the end of the day, if you’re carrying forward the position, SPAN & Exposure margins would be deducted from your account, the details of which you can see on your ledger in Q. The whole of the SPAN + Exposure margins will be blocked from the Cash component, since the effect of collateral margin isn’t shown on the ledger. However, if you have cash margin equal to 50% of the total margin (SPAN & Exposure), no interest would be levied on the account.
Hello Venu,
Basically i want to know how much cash & collateral margin separtely is available for new position . How can i get that data (Cash Available ) from the following.
MARGIN AVAILABLE 72,336.74
MARGIN USED 83,913.13
TOTAL ACCOUNT VALUE 84,792.66
The above date gives Margin available but doesn’t say how due to Cash and collateral individually.
If the cash balance is in debt. How do i get to know this information before being charged interest.
Let me know if you want more clarity on the question or share the email / Phone number to whom i can discuss this.
Thanks
DeepWater
Hi,
I would like to buy liquid funds for my account to pledge for the margin for F&O trading. Where do I buy the liquid Funds ?. Is it in kite or coin platform? . How do I see the various liquid funds available with zerodha?. I couldn’t login to coin as it says ‘ Mutual Funds are not enabled in my account’. So, How do I go about it?. Thanks.
You can buy and pledge liquidbees, to buy liquidbees, you’ll have to add it on the Equity marketwatch and execute a CNC purchase.
We aren’t accepting MF for pledge yet.
Why are Liquid Bees not in the list of pledges?
Ah checking, but you can pledge liquid bees.
If I Pledge my shares today and after over a year, I unpledge and then sell those shares for a profit.
Will these profit be taxable or not.
Hi,
When will pledging of MF units be possible ? It has been pending from a long time.
Reconciling all corporate actions on MF is a pain. But we are hoping in the next few weeks.
Suppose if I pledge 200 liquid bees first then again 100 later but unpledge total 300 in multiple times (say 15)then I will be charged (Rs 60×2)+GST or much more since I am unpledging in multiple times?
It’s Rs.30+GST for pledge and Rs.30+GST for unpledge, if you unpledge multiple times, then charges will be applied accordingly.
I think we are charged Rs 60 + GST for Pledging and nothing for Unpledging.
What I’ve given you is the breakdown of the charges. Technically, it’s Rs.30 for pledging and 30 for unpledging.
But Zerodha charged me Rs 70.8 (60+GST) while pledging only. It means u will again charge for unpledging if I do multiple times? In that case u should have charged me Rs30+GST then why Rs 70.8 was charged? This all is in reference with the reply give by you to my query.
Ravi, the entire process of pledging and unpledging will cost Rs 60 per scrip irrespective of the quantity. Rs 30 + 30 is the breakdown, you won’t be charged anything when you unpledge.
Hi Nitin,
Can i pledge direct MF?
For example if i hold 1000 shares of a company and i pledged 500 of them by paying Rs.60 and later i want to pledge some more shares of the same company. Do i need to pay Rs. 60 as change for additional shares?
Thanks
Currently not possible to pledge MF.
For example if i hold 1000 shares of a company and i pledged 500 of them by paying Rs.60 and later i want to pledge some more shares of the same company. Do i need to pay Rs. 60 as change for additional shares?
Yeah, you would have to.
You can improve system further
You can
1) Give option to “cancel pledge” after giving request for “Pledge” (but before accepted by Zerodha) i.e. before 4 pm
2) Why you charge “processing fees” if you are otherwise charging for interest ? or moderate processing fees parallel to brokerage
3) Margin on T days is better than T+1 day
4) Offer Nifty & Sensex chart on Kite marketwatch
5) Reduce space between stock list on marketwatch on kite, so we can see more stock without scrolling
6) Can increase marketwatch list from present 5 to say 8 on kite
7) Why you need mothers median name while uploading Aadhaar ?
8) Offer margin funding for equity delivery segment AS WELL AS “FPO” with moderate interest
9) Make good profit by
a) charging on equity delivery segment too 🙂
b) One stop financial stop can be further evolution / enhance brand zerodha i.e. start offering more securities as well as financial / nbfc products too
so one day we can make money in Zerodha IPO too 😀 😀
hi nitin, a genius of stock 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?
Harish, conspiracy theories they are. Yes,people who subscribe to exchange TBT data feed can see all ticks on the exchange. But moving the market to just take someone’s stoploss out is not really possible. Also, there is no way to know if it is stoploss or fresh order.
if i have 50k liquidbees and if i pledge them the concept of charging interest on debit balance will not be applicable right, i will only be charged Rs. 60/- for pledging even if it N no. of days.
Yes, correct.
Hi Nithin sir
im not understanding liquidbees?could you pls elaborate it
im presently holding 9200rs worth stocks(hdfc,ongc,coal india)
cash in trading account 800rs
if i pledge stocks how much margin i will get (as per 50%cash+50%margin)
if i get margin on pledging can i use it for intraday equity
will i get 20*times in bo for this
Hmm.. if you pledge Rs 9200, you can get around 70% of this as margin. This can be used only for F&O and not equity trades.
Hi, I want to know if i have pledge some shares then can i short sell first and then unpledge the share. This is for the situation where stock price has gone up and i dont want to cover it. Regards.
ah currently not possible to short sell for overnight unless you have stock in your demat.
Hi Nithin, May I request to adjust your systems since you draw the stocks from demat next day while It will be available (from unpledging). Regards.
Hi Nithin
Please specify a exact time by when margin funding accounts will be available for us.
Due to lack of this facility in Zerodha many people including me are planning to shift ShareKhan with bargaining interest rates.
I am eagerly waiting for this requirement as being a the Zerodha community!!
Regards,
Satya.
We’re in the middle of setting up systems, we will let you know soon.
Hi Venu
Thanks for your reply.
Any specific deadline to rollout this functionality into production?
Can it happen in this year at least?
Also what is the minimum interest you charge for the margin that we use?
Please elaborate.
This year for sure. Interest rates will be revealed soon.
Hi, any news on this? Really looking forward to this and I’ll switch 100% from Kotak Sec to Zerodha.
Hi Nithin,
As per recent media reports, providing overnight margin facility by brokers has been cleared by SEBI, for upto 4 times the pledged amount (in shares). Any details on when Zerodha is planning to provide this option to its customers?
Regards,
Aditya
It is not for pledged, it is for margin trading. It is also only upto 2 times. We are working on it.
If I pledge SBI ETF NIFTY 50 (SETFNIF50) . Will the colateral be considered as equivalent to Cash for Options trade?
No, only liquidbees considered as cash.
But Ur Customer Care executives told me that it will also be considered as equivalent to Cash.
I wanted to confirm it from U.
Are u really sure about it not considered as cash.
Nifty ETFs have risk associated to it, can’t be treated as cash.
Besides Liquid BeeS, which other ETFs are considered equivalent to Cash?
Nothing else.
Also, for MTM losses only cash is accepted ? Cant my pledge margin be used for it ?
Exchange debits cash from us. So liquid bees won’t help.
If I have pledged LIQUIDBEES + STOCKS, and my F&O margin required is well within pledged margin, will I be charged any interest ? In what order do you consider pledged margin to cover F&O margin ?
If I have only LIQUIDBEES, this problem wont be there as there would not be any interest. Please correct if I am wrong.
50% of margin required has to come from liquidbees or cash. If it isn’t there, then interest charged.
Is it only liquid Bees or any ETF?
Only liquid bees
Are all ETFs, like newly intoduced bharat-22 fund, treated as equivalent to Cash while using as margin for FnO trades?
yes
1) Is it possible to place unpledge request if Future contract is in place with positive MTM ?
Only if you have enough cash margin to hold the future position after the MTM credit.
plz clarify the ‘enough’ margin
Enough is the SPAN+exposure margin that is required to hold your futures position.
1. whats th benefit of Pledging the demat position If 50% cash needs to be allocated for taking position in FnO segment even after having enough pledged margin when you have right to square off pledged equity in case of MTM losses which is not paid regular basis ?
2. Why i cant sell directly the pledged equity if market turn in opposite direction. Waiting to unpledge and then sell is a risky factor then whats the benefit doing pledge.
When AxisDirect hav no such mentioned problems and my switching to Zerodha become unsuccessful.
1. That’s how the Exchanges block margins for F&O positions taken, equal amounts of cash and collateral. In the event that you don’t maintain the ratio, our funds would be blocked which is why we charge interest on such shortfall in cash margins. However, you’ll continue to get the benefit of keeping positions open to the total value of cash+collateral available in your account.
2. There’s time involved in unpledging, which is why we aren’t providing the instant unpledge facility. We’re working on making it happen instantly.
If i occur loss from the pledging margin, say i losses 10% in FNO, How much time does zerodha give me to maintain MTM margin? Or will it continued as loan amount and interest will be charged from the debited amount until i deposit money into the trading account?
If you have sufficient collateral margin, interest will be charged. If not position will be squared off before end of the day if margin drops below minimum SPAN.
Thanks for the clarification.One more question?
I brought sunteck and pledged it, 3 days back stock was split and now the stock was not showing neither in pledge holding or in t1 and t2. How much time it will take to credit my stock?
If credited, will it be in pledged holding or in my demat(mean t1 and t2)
If the stocks are already pledged and then there’s a split, the number of stocks you’ve pledged goes up. Eg: If you’ve pledged 100 stocks, and the split ratio is 1:1, the number of pledged shares becomes 200.
Yeah, exactly the same thing i am expecting. But surprisingly today the stock is not showing on Q, under pledging tab. May i know what was the reason behind it?
You’ll be able to see the revised quantities by today eod.
It was not showing till now.
Can I pledge stocks and take available margin back into my account and use it for other purpose?
You can use it only for trading F&O. We have just got our NBFC license and will soon start Loan against shares. In which case you can take the money to bank account and do whatever.
What will be the loan to value ratio and interest ratio for the same?
hmm.. didn’t get ur question.
Is it possible to do cash and carry arbitage with pledged margin?
Say i have 2Lks margin available in my tading account and i want to sell one lot kotakbank( 800shares) in current month future and buy 800 shares of kotakbank.
Buying will cost 800*share price 1000= 8Lks
Selling will block around 1.5-1.7Lks
Total required money in account around 10Lks.
But as this a hedge trade can i have margin benifit?
Ah no, you don’t get any margin benefit. You can buy Kotak and pledge it and release 50% of stock bought as margin. This can be used for the F&O position.
Dear Nitin,
I had two questions for you. I have spoken to the support team of Zerodha but I am still unclear so posting here.
1) I want to pledge 50% stock (after haircut) and put 50% liquid bees (after haircut) am looking at 25L stock and 25L liquidbees to start with and go upto 1cr stock and 1cr liquidbees. But I want to ensure my trade is squared off if I do not have M2M balance. I do not wish to touch my margin money to service M2M loss. I prefer my trade being squared off keeping the margin money strictly for margin use. Is that possible ?
2) I am in the process of forming an LLP with a friend of mine. For which we will open a trading account with Zerodha. Can I pledge stocks in my personal name and get margin against it in the LLP account ? I will be 50% partner of the LLP. I do not wish to buy the stock in the LLP name as the partnership is strictly being formed to trade F&O. But I have a lot of long term stocks in my DP which are just sitting idle so would like to use those stock to get margin (keeping the 50-50 stock and cash ratio). And the first question is related and relevant now cause I would not like to risk my personal stocks for M2M loss of the partnership firm where I am only 50% partner. It also makes the trader discipline where in he is forced to square off without M2M balance.
3) If not for trading, can we pledge shares to Zerodha to be used as margin funding for other traders and receive a premium / interest on it. So for a stock I am holding long term, I get additional income over and above the appreciation in the stock. If Yes, what rate of interest are we talking about. A ball park figure.
Thanks
Priyank
1. hmm.. no. Our square off rules set by RMS doesn’t distinguish clients based on if margin through liquidbees or cash.
2. No, the stock has to be in the LLP name.
3. No
Since Sovereign Gold Bonds are accepted by nse as collateral, then zeroda should also allow it as collateral as cash component and also please allow trading in the listed sovereign gold bonds
Many of us are investing in SGB and margin facility is highly appreciated
Hi Sir,
How to activate F&O trading in my account account as it is not active
Can you email [email protected]. If you haven’t enabled during account opening, you have to send segment addition form from here: https://zerodha.com/resources. Also attach an income proof when sending this.
Why are you charging Rs.60+ gst on pledging of the shares.
Other brokerages does not charges for it.
Vivek, unlike other brokerages we don’t keep the share with us, we actually pledge it with NSDL. It is not compliant for broker to keep client stock with himself.
sir,
Here is a humble request for u… please provide margin from pledging of shares to trade in cash segment (intraday purpose only)
with regards
sanjoy Kr Sarma
Sanjoy, regulators don’t allow this.
Whether margin received from Pledging of shares can be used in cash segment (Intraday). If yes, whether there will be any interest charged.
No, it can’t be used.
Hi Nithin,
Have you started to accept ‘Smallcase as a single unit’ for pledging charge purposes?
If not, request you to consider as it costs too much to pledge/unpledge 10-20 number of stocks per smallcase every 3 months.
Thanks in advance.
Ah not possible to accept as single unit. Btw, we have received our NBFC license, we will start accepting shares soon without moving it out of your DP for pledging soon.
That’s very quick response, Thanks Nithin.
A ballpark number of how soon can we expect this to be ready?
Hopefully in 6 to 8 weeks.
Thanks Nithin
Dear Nithin,
Have you started to accept mutual funds for pledging ? If yes, which funds ?
Not yet.
The main article says “we will soon start accepting MF for pledging”. I guess It has been one and half years since it was written. Any thoughts on from when your plan to accept MF’s for ledging?
We just got our NBFC license. We will have to take this pledge using the NBFC entity. We will do this hopefully in the next couple of months.
Hey,
If I pledge liquid bees, I can carry overnight sell positions and the amount received from the pledge of liquid bees will be considered cash.
Wrt above, once pledged, will I continue to receive dividend from the liquid bees?
Yes, you will continue to receive dividends.
What is Tejasnet not available for pledging as collateral for FnO ?
Stocks that can be pledged is as per what exchanges allow.
hi, if i pledge shares of RS 1 lakh and get margin 90000 (after 10% hair cut), can i use this margin for CNC i.e. for like cash delivery for 3-4 months or trading for long and short term on delivery bases but in cash equity market only not in derivatives , is this possible? what are other t&c for cash delivery trading on pledge margin?
No, you can pledge and use the money to buy more stocks. Margin can be used only for F&O trades.
Hi,
If i pledge my holding, then will it be considered as long-term capital gains (exempt from tax) if I sale it after 12 months period?
E.g.
Script: Reliance (Qty:1000)
Date of Purchase: 01.06.2017
Date of Pledging: 01.07.2017
Date of Unpledging: 01.05.2018
Date of Sale: 01.09.2018
Here…..
Total Holding period: 15 months
In my Demat a/c: 5 months (1+4)
With Zerodha (Pledged): 10 months
Thanks in advance.
Yes it will be LTCG, when you pledge the holding period doesn’t get affected.
hi nithin ,
once we pledge a stock , is there any time limit for pledging the stock or are there any extra chrges apart from rs 6o per script . ????
can a stock be pledged for 1year …???
You can pledge when you wish to, there are no time limits. Cost of pledging+unpledging would be Rs.60 regardless of when you unpledge them.
Lets consider a scenario,
1. pledged liquidbees for Rs.1,00,000 and got margin of Rs.90,000 ( after 10% haircut)
2. Bought Nifty future as overnight position Rs.58,000
3. Remaining is Rs.32,000
Can this residual margin of Rs.32000 be used for covering MTM losses in Nifty future position
MTM losses has to be paid in cash to the exchange. The free margin from pledging wont’ help.
Hi Nithin,
When can we expect the mutual fund pledging?. Is the same available for small case?
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.
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.
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
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.
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.
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.
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 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.
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.
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.
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?
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.
“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.
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!
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.
Now it is clear.
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/
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.
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.
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.
When will you start including investments in equity MFs to be pledged for F&O Trading
# 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.
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.
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.
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.
Can we pledge Mutual fund ?
No
But, Y?
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
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.
Nithin, Can I use margin against share for commodity trading?
Not allowed by SEBI
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.
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.
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.
what other instruments other than Liquidbees are considered cash equivalent ?
Only liquidbees
Hi
Please check option of giving margin for delivery with minimal interest rates.
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.
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 ….
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.
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.
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.
the margin benefit for a calendar spread would continue till expiry of the near month contract. Is this applicable to Equity segment
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
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…
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 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.
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.
Can i use collateral margin for buying MCX contracts
No
Can collateral margin be used to buy securities in cash segment.
No Vinoth.
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.
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.
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 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.
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 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.
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 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.
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.
Can I pledge Sovereign Gold Bonds??. If yes what is is the haircut??
NO this can’t be.
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.
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.
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.
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.
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.
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.
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.
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.
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]
Is Mutual Funds pledging enabled yet? If yes, what are the haircuts?
Not enabled Namit
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*
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?
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 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!
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.
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.
Is it possible to pledge in Account A and get the margin in Account B?
No
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.
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.
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.
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.
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.
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.
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
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.
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.
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
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,
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.
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.
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.
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.
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.
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.
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.
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.
“We will soon start accepting mutual funds also to provide collateral margin.”
Started accepting ?
No, some operational issues. It will take more 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.
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.
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!
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 :).
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.
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
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
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.
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.
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.
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/
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.
You skipped my query..
Missed, have replied.
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.
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.
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.
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?
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
Why we cannot use the margin for buying options.? If possible please provide this feature as well.
Exchanges don’t allow this.
My id is DR0612
Want to know whether I can use funds I get thro’ pledge for MIS .
Yes you can.
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 ?
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).
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.
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/
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.
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.
Please start margin lending for equity delivery.
We’ll let you know when we start.
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.
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.
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.
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?
Why is the ledger balance not showing after 31st March ?
Some year end issues, should have been fixed by eod.
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.
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 ?
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.
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
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.
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.
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
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.
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.
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.
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,
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 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 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.
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.
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
thanks nithin for the information
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.
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.
I see 404 error when I try to download account opening docs from Zerodha site. Can someone help me?
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.
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.
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.
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.
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.
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!!
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.
what type of skills required to be a trader and how to know i become a good trader?
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.
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]
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.
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.
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,
Whether, we can use collateral margin for Equity – Delivery or Equity – Intraday??
No.
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.
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.
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.
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.
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.
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.
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.
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.
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 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
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
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.
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.
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.
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.
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
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.
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.
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?!
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.
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.
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.
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.
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/-
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
can we pledge bank fixed deposits / RBI t-bills / govt. securities / bonds also ?
No, not possible.
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.
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.
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.
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.
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.
Hi Nithin,
Suppose today I pledge 100 stocks of infy and after 10 days I pledge 100 more stocks of infy, what will be my total cost of pledge+unpledge ? Will it be 60 or 120? Although the script is the same but I am pledging two times?
Thank you,
Achla
Hi Achla, the cost for pledging is Rs. 30 + GST per pledge instance irrespective of the quantity. Since you’re pledging shares twice, the total charges will be Rs. 60 + GST. There are no charges for unpledging.
U want any details call me sir I will guide u
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
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