Yes, we do provide collateral margin against your holdings i.e. stocks, ETFs and MFs. You can pledge your holdings for collateral margins, which will be credited into your trading account after a deduction of a certain percentage or haircut. Clients can trade with the margin received from pledging in Equity Intraday, Futures, and Options (Selling) segments.
Fyers is one of the very few brokerages that allow the clients to use the entire collateral amount for taking positions without bringing in additional cash. In simple terms, You can use the entire collateral amount to trade in the above-mentioned segments.
For Instance, Client ‘X’ has pledged ₹1,00,000 worth of holdings for additional leverage. Assuming that the applicable haircut is 10%, the exchange will release a margin of ₹90,000 [i.e., 100000 – (100000*10%)] after the deduction of such haircut. So, Mr. X can use the entire collateral amount of ₹90,000 to trade in Equity Intraday, Futures, and Options (Selling) segments without bringing in any additional cash.
However, Clients are recommended to maintain 20% cash balance in order to meet the Mark to Market (MTM) requirements (in case of losses) and avoid debit cash balance. Having a debit cash balance will attract Invocation of Pledge (refer to this article).
Important points to be noted:
- The stocks bought today will be eligible only on the T+3 days. For instance, stocks bought on Friday will be eligible to pledge on Wednesday.
- You’ll need to place a pledge request at pledge.fyers.in and authorize the pledge using OTP. Check out the step-by-step procedure to authorize the pledge in this article.
- Check out the applicable Haircut for Approved Securities and Mutual Funds here.
- For Unpledge of shares, you’ll need to place a request by writing to email@example.com as the procedure is offline at the moment.
The cost of pledge/unpledge is ₹0 (w.e.f. 1st March 2021)