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, Equity Derivatives, and Currency Derivatives segments.
Fyers is one of the very few brokerages that allowed the clients to use the entire collateral amount for taking positions. However, with effect from 11th August 2022, clients must maintain a cash balance of 50% of the desired position/s along with the collateral margins. Failing to do so, the difference amount will be subject to interest charges at 18% per annum (0.05% per day).
For Instance, Client ‘X’ has pledged ₹1,00,000 worth of holdings for additional leverage and has a cash balance of ₹50,000. 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. Mr. 'X' can take positions worth ₹1,00,000 (50,000+50,000). In any case, if Mr. X utilizes an amount greater than ₹1,00,000 (without adding additional funds), he will be levied interest charges of 0.05% per day. Let us understand the applicable interest charges in the following cases:
- Mr. X utilized only utilized ₹1,00,000: In this case, Mr. X will not pay any interest charges as 50-50 cash and collateral is maintained.
- He utilized ₹1,20,000: As Mr. X has utilized an amount in excess of ₹1,00,000, interest charges will be levied at 0.05% per day, which amounts to (1,20,000 - 1,00,000)*0.05/100 = ₹10 per day.
- He utilized ₹1,40,000: In this scenario, Mr. X has taken position/s with his total funds, and the applicable interest charges will amount to (1,40,000 - 1,00,000)*0.05/100 = ₹20 per day.
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.
Charges:
The cost of pledge/unpledge is ₹0 (w.e.f. 1st March 2021)
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