Margin Pledge serves as a means to amplify margin availability for F&O trading by leveraging securities like Stocks, Mutual Funds, SGBs, and ETFs from your portfolio. Upstox accepts stocks, ETFs, Mutual funds and SGBs for pledging.
For example, if a stock within your portfolio is trading at ₹100 and you decide to pledge it, you can gain a margin of ₹85 specifically for F&O trading.The remaining ₹15, termed as a' haircut,' represents the discrepancy between the security's market value and its value after being pledged. This haircut acts as a precautionary measure, accounting for potential market risks or uncertainties.
Important considerations:
- Regulatory guidelines dictate maintaining a 50:50 ratio between Cash and Collateral while pledging securities.
- Effective October 2023, we have introduced a provision allowing 100% collateral without obligating adherence to this ratio. A nominal interest of 0.05% per day on the cash margin shortage, according to the 50:50 cash collateral ratio, will be applicable.
- Collateral margin can be used for buying & selling Futures, Options buying & selling (writing) ,buying & selling Equity Intraday and Equity delivery purchases.
- Access the list of available securities for pledging by logging to your upstox app using your 6-digit PIN or biometrics, go to 'My account' > 'Actions' > 'Margin Pledge'.
- You will continue to enjoy benefits from corporate actions such as bonuses, dividends, splits, and other entitlements.
- Upstox allows you to avail margin via Margin Pledge to trade in the following products:
- Buying / Selling Futures
- Buying / Selling Options
- Buying / Selling Equity Intraday
- Buying Equity Delivery
Note: Collateral margin is not available for the Commodity segment.
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