Day Trading Stocks & Futures

[shivroy]

OFSS (inverse h&s)

 

[garry1313]

Every broker will charge interest if we use their funds, its not that they have excess funds and giving us interest free. This is for sure.

But what you all noticed with zerodha is also correct as follows if my understanding is correct -

Basically what you guys are referring here is not a stock pledge with broker to get trading exposure/limits. In this system the stock pledge is done with Depository and no real funds are involved to the extent of pledge and margin used. So if I pledge shares and get 10 lakhs collateral margin, it is a margin I got against my pledge from and allowed by ndsl/cdsl but not from my broker. Here broker funds are not involved.

Now when I want to buy a Nifty future at 1.5 lakh margin, as per rule, I can use 75 k from my pledge margin and other 75 k I must bring in cash.
So for the first 75k anyway the broker cannot charge interest as it leverage allowed by depository against our stock and the second 75k we must bring in cash and if we have shortfall in this, the broker adjusts the shortfall amount and will charge interest for using that broker funds.

Zerodha is not charging interest here for first 50% because it is not the party providing that 50% margin. And it charges interest in name of late fee at 18% for any shortfall funds in the balance 50% which clients must bring. So zerodha is not doing any free interest thing here.

Also we cannot trade all position's using this pledge margin. Equity delivery and options buying cannot happen under this. This is for equity intraday, futures and options writing intraday or carry forward . Because equity bought by a party is sold by another and amount must be settled in equity delivery segment. So a exposure allowed by depository against my stock wont work as cash that has to be paid by eod. Since fno are limited period contracts and just p/l settled the product is feasible in this segment.

Need some more gyan on this. Suppose I want to short nifty option and margin required is 1 L, If I keep 1L in niftybees and another 30K in cash in zerodha, am I supposed to pay any charges for pledging/interest.

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[shivroy]

KANSAI, Good BO with retest done

 

[mohan.sic]

Need some more gyan on this. Suppose I want to short nifty option and margin required is 1 L, If I keep 1L in niftybees and another 30K in cash in zerodha, am I supposed to pay any charges for pledging/interest.

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You need to pledge your lakh value Niftybees and say if you got 80 k as collateral margin against the pledged stock.
And when you need 1 lakh margin for shorting nifty option-
50 k will be considered as margin from your available collateral margin limit of 80k and and the balance 50k you must bring in cash.
As you have 30 k cash, you are in shortfall of 20 k and you will be charged interest at 18% for the shortfall amount which is 20k.
Note- you cannot buy options and equities delivery with the margin from this pledge.

Above is my understanding from reading zerodha blog yesterday..
Any zerodha traders here can confirm if it is correct or no.

I pledge my shares with kotak and they provide collateral margin after the haircut which can be used on all segments intraday and carry forward except option buying. When we use this collateral margin, they will charge interest at a certain rate for the amount used and number of days it is used. This interest has to be paid monthly and if we don't pay they charge interest on interest also. .
If I had to take a option short trade which requires 1 lakh margin I pay interest on entire one lakh if the trade is carry forward.

 

[sanju005ind]

You need to pledge your lakh value Niftybees and say if you got 80 k as collateral margin against the pledged stock.
And when you need 1 lakh margin for shorting nifty option-
50 k will be considered as margin from your available collateral margin limit of 80k and and the balance 50k you must bring in cash.
As you have 30 k cash, you are in shortfall of 20 k and you will be charged interest at 18% for the shortfall amount which is 20k.
Note- you cannot buy options and equities delivery with the margin from this pledge.

Above is my understanding from reading zerodha blog yesterday..
Any zerodha traders here can confirm if it is correct or no.

I pledge my shares with kotak and they provide collateral margin after the haircut which can be used on all segments intraday and carry forward except option buying. When we use this collateral margin, they will charge interest at a certain rate for the amount used and number of days it is used. This interest has to be paid monthly and if we don't pay they charge interest on interest also. .
If I had to take a option short trade which requires 1 lakh margin I pay interest on entire one lakh if the trade is carry forward.

Yes you are right about the Zerodha. Haircut for Niftybees is about 11.65%. The rule of 50% cash which Zerodha has kept is because of the requirement from Exchange for all the brokers . It is just that some people pledge and some people dont so on an average they can show 50:50.But Zerodha being the biggest broker is afraid what if everybody pledges then there will be no cash components left.So as a precaution they ask 50% cash to be maintained for NRML(Over night positions) as per Nitin Kamat.

 

[garry1313]

Thank you for clarity @mohan.sic @sanju005ind Sirs.

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[brokenbull]

when you say in Kotak you can use the margin obtained from collateral for all segments except option buying ----- can you buy overnight delivery stocks also?
For example say you have long term 2000 shares of ITC, 1000 shares of Powergrid ,1000 shares of ONGC etc & pledged them-- can you buy fresh say 1000 ITC or Powergrid (averaging) & pay interest monthly (till you sell & clear the margin loan ) till you sell the short term purchase?

 

[mohan.sic]

when you say in Kotak you can use the margin obtained from collateral for all segments except option buying ----- can you buy overnight delivery stocks also?
For example say you have long term 2000 shares of ITC, 1000 shares of Powergrid ,1000 shares of ONGC etc & pledged them-- can you buy fresh say 1000 ITC or Powergrid (averaging) & pay interest monthly (till you sell & clear the margin loan ) till you sell the short term purchase?

Exactly right but if portfolio values come down we must adjust the shortfall regularly. And am not sure if they made any changes due to new rules.

 

[mohan.sic]

Yes you are right about the Zerodha. Haircut for Niftybees is about 11.65%. The rule of 50% cash which Zerodha has kept is because of the requirement from Exchange for all the brokers . It is just that some people pledge and some people dont so on an average they can show 50:50.But Zerodha being the biggest broker is afraid what if everybody pledges then there will be no cash components left.So as a precaution they ask 50% cash to be maintained for NRML(Over night positions) as per Nitin Kamat.

No issues even if every one pledge their stocks. Because for the shortfall margins they are charging 18% and they can easily borrow funds at better rates. They make good money in this. Some brokers interest income is higher than broking revenue.

 

[tradermodified]

Any idea where market (NF and BNF in particular) is likely to move in next 1-3 days
Direction and approximate level.
Your comments please.

Even paper traders can comment
(Even followers of Wycoff, Albrook or any other great analyst)