F&O margin using Cash market securities

[andygp]

I have been wondering if one needs to pay interest if one uses cash market securities in DMAT account for satisfying initial and exposure margin requirements on F&O side. MTM losses obviously will have to be paid in cash.

An example:

I have 10L worth stocks, after haircuts etc. this comes to say 7L. Also with the same broker I have a few F&O positions which has 5L as my initial and exposure margin requirements. Now do I need to put this 5L in cash in my account? If I don't and the broker uses my securities as collateral, does he need to charge me interest on this amount?

I have been getting contradictory statements about this from different brokers. Some say they will not charge interest (Kotak, Anand Rathi), some say they will charge interest (Indiabulls). Also Indiabulls is saying that it would be impossible for any broker to put your cash market securities as margin with the exchange unless they are transferring to a pool account, so they have to provide cash from their pockets and consequently interest will have to be charged.

Anyone knows actual exchange rules?

 

[srikanthko]

You can put your shares as collateral for trading in F &O. But you have to settle MTM losses in cash everyday. Sharekhan & Religare does not charge any thing when you put shares as collateral but ICICI Direct will charge some fees. I do not know about indiabulls,kotak. Charging of fees depends on brokerage companies and has nothing to do exchange. With some brokerage houses you have to inform them to put the shares under collateral and in some companies (ICICI Direct) you can place yourself online. Please check with your broker about this information.

 

[ugb]

Are there any fixed income securities like Govt sec or bonds which can be offered as collateral for initianl margin. The idea is that when market falls the value of collateral does not fall and one can also earn some interest.

I understand that NSE also accepts bank fixed deposits. How far is it practical to offer bank deposit as collateral

 

[anandktripathi]

Hi,

Today only I came to know about a service from my broker named SHARES AS MARGIN. After going through with the FAQ's it seems an interesting thing but still a lot of questions are unanswered.

Mostly I trades in Index Options.

Will I be able to carry forward my position till the expiry if I have enough shares to deposit i.e. I want to buy a call of Nifty 4000 and I can deposit my shares instead of cash and carry forward my position till the expiry without depositing the cash????

Thanks in advance......

Anand