Finvasia

CougarTrader

Well-Known Member
ETF such as NiftyBees etc can be pledged using the same process like stocks
Ok.. but margin derived from pledged Stocks or Indices based ETFs inherits other degree of risk pertaining to relative price fluctuations. So, out of all available ETFs only LiquidBees is safe but the problem with LiquidBees is that it is hard to liquidate the fractional units left behind after exiting, actually I don't know how to liquidate the fractional units of LiquidBees.

Could you please shed some light how to encash fractional units of LiquidBees?
We have taken your feedback about MF pledge and shared to the concerned team
Thank you!

Mutual funds like Liquid funds, constant maturity GILT funds or any other GOI/AAA/AA/A+ bond/NCD based Debt funds are very safe and when pledged for margin it acts as additional moat that earns interest along with facilitating Exchange's margin requirements for certain category of open positions, whereas, simple floating cash kept as margin to Exchange does not earn anything apart from the P&L determined from undertaken positions.

I am certain that if you succeed in facilitating/streamlining MF pledging, it shall bring good new business to you. Not only you'll earn additional revenue by distributing Mutual Funds but you would also attract HNI clients who tend to take overnight derivative positions. You see, a broker must not be always judged on how much leverage it gives.
 
@Finvasia, please reply my query, so as to manage/keep my funds accordingly.

Dear @Finvasia, please answer following queries:

Case 1: Suppose I buy 1 lot of BN 22500CE (on Monday) @ 100 and sell it same day for 140, what should be the total credit (on completing this buy/sell trade) to my trading account. (not accounting for taxes etc)

Case 2: Suppose I buy 1 lot of BN 22500CE (on Monday) @ 100 and sell it on Tuesday for 160, what should be the total credit (on completing this buy/sell trade) to my trading account. (not accounting for taxes etc)

Case 3: Suppose I buy 1 lot of BN 22500CE (on Monday) @ 100 and sell it on Tuesday for 160, again buy same strike at 140 after an hour. What should be the total credit/debit (for these 2 trades) to my trading account. (not accounting for taxes etc)

Case 4: Suppose I buy 1 lot of BN 22500CE (on Monday) @ 100 and sell it on Tuesday for 160, again buy same strike at 140 after an hour and sell at 200 . What should be the total credit/debit (for these 3 trades) to my trading account. (not accounting for taxes etc)

Please let me know. Thanks
 

Finvasia

Well-Known Member
Dear @Finvasia, please answer following queries:

Case 1: Suppose I buy 1 lot of BN 22500CE (on Monday) @ 100 and sell it same day for 140, what should be the total credit (on completing this buy/sell trade) to my trading account. (not accounting for taxes etc)

Case 2: Suppose I buy 1 lot of BN 22500CE (on Monday) @ 100 and sell it on Tuesday for 160, what should be the total credit (on completing this buy/sell trade) to my trading account. (not accounting for taxes etc)

Case 3: Suppose I buy 1 lot of BN 22500CE (on Monday) @ 100 and sell it on Tuesday for 160, again buy same strike at 140 after an hour. What should be the total credit/debit (for these 2 trades) to my trading account. (not accounting for taxes etc)

Case 4: Suppose I buy 1 lot of BN 22500CE (on Monday) @ 100 and sell it on Tuesday for 160, again buy same strike at 140 after an hour and sell at 200 . What should be the total credit/debit (for these 3 trades) to my trading account. (not accounting for taxes etc)

Please let me know. Thanks

Hi @tradermodified!

Case 1: If you bought 1 lot on Monday @ 100 and sold on same day @ 140; Total credit in your account would be:
Rs. 2500 (100*25) - 3500 (140*25) = Rs. 1000 credit

Case2: If you bought 1 lot on Monday @ 100 and sold on Tuesday; Total credit in your account would be:
Rs. 2500 (100*25) debit on Monday,
Sold on Tuesday @ 160 (160*25) = Rs. 4000 credit on Tuesday

Case 3: If you bought 1 lot on Monday @ 100,
Monday - Dr 2500 (100*25)
You sold it @ 160 (160*25=4000) on Tuesday and buy back same strike @140 (140*25= 3500),
Total credit in your account would be: Rs. 500 (4000-3500) on Tuesday.

Case 4: If you bought 1 lot on Monday @ 100; Account debit = 2500 (100*25),
Sold on Tuesday @ 160 = Cr. 4000 (160*25)
Again bought @ 140 = 3500 (140*25), sold at 200= 5000 (200*25)
Total credit = 1500+4000= Rs. 6500

Thanks
 

ryan4ucar

Well-Known Member
Hi @Finvasia what is your policy on physical settlement on futures and options during expiry week? for example if i have a credit spread strategy with both options now in the money , so essentially one cancelling the other for delivery how is this settled on expiry?
 
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Hi @tradermodified!

Case 1: If you bought 1 lot on Monday @ 100 and sold on same day @ 140; Total credit in your account would be:
Rs. 2500 (100*25) - 3500 (140*25) = Rs. 1000 credit

Case2: If you bought 1 lot on Monday @ 100 and sold on Tuesday; Total credit in your account would be:
Rs. 2500 (100*25) debit on Monday,
Sold on Tuesday @ 160 (160*25) = Rs. 4000 credit on Tuesday

Case 3: If you bought 1 lot on Monday @ 100,
Monday - Dr 2500 (100*25)
You sold it @ 160 (160*25=4000) on Tuesday and buy back same strike @140 (140*25= 3500),
Total credit in your account would be: Rs. 500 (4000-3500) on Tuesday.

Case 4: If you bought 1 lot on Monday @ 100; Account debit = 2500 (100*25),
Sold on Tuesday @ 160 = Cr. 4000 (160*25)
Again bought @ 140 = 3500 (140*25), sold at 200= 5000 (200*25)
Total credit = 1500+4000= Rs. 6500

Thanks
Thanks for reply in detail.
What I understood,
in option trades (buy and then sell) full amount (invested amount + profit, if there) will be credited on close of a trade (buy and sell), whether intraday or a carried forward buy trade.

That is, there is no change in computing amount balance (as in RMS view) after a trade,
it is as previously, 1 month ago or 1 year ago

Am I right or missing something.

btw, last line of your post
Total credit = 1500+4000= Rs. 6500

should be
Total credit = 4000+1500= Rs. 5500
 
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@Finvasia, awaiting your response. Thanks

Thanks for reply in detail.
What I understood,
in option trades (buy and then sell) full amount (invested amount + profit, if there) will be credited on close of a trade (buy and sell), whether intraday or a carried forward buy trade.

That is, there is no change in computing amount balance (as in RMS view) after a trade,
it is as previously, 1 month ago or 1 year ago

Am I right or missing something.

btw, last line of your post
Total credit = 1500+4000= Rs. 6500

should be
Total credit = 4000+1500= Rs. 5500
 

Finvasia

Well-Known Member
What I understood,
in option trades (buy and then sell) full amount (invested amount + profit, if there) will be credited on close of a trade (buy and sell), whether intraday or a carried forward buy trade.

That is, there is no change in computing amount balance (as in RMS view) after a trade,
it is as previously, 1 month ago or 1 year ago

Am I right or missing something.
Yes, that is correct.

btw, last line of your post
Total credit = 1500+4000= Rs. 6500

should be
Total credit = 4000+1500= Rs. 5500
Thanks for pointing it out. Apologies for the typo.
 

Finvasia

Well-Known Member
Ok.. but margin derived from pledged Stocks or Indices based ETFs inherits other degree of risk pertaining to relative price fluctuations. So, out of all available ETFs only LiquidBees is safe but the problem with LiquidBees is that it is hard to liquidate the fractional units left behind after exiting, actually I don't know how to liquidate the fractional units of LiquidBees.
Could you please shed some light how to encash fractional units of LiquidBees?
Hi @CougarTrader! Fractional units of liquidbees can not be sold in the secondary market. You can redeem your fractional units using delivery instruction slip (DIS) or redemption form. To get redemption form you can create a ticket in PRISM. You need to fill all the required info and courier it to our corporate office. If you still have any query, please inbox your client code someone from the team will get in touch to explain the process in detail. Regards
 

CougarTrader

Well-Known Member
Hi @CougarTrader! Fractional units of liquidbees can not be sold in the secondary market. You can redeem your fractional units using delivery instruction slip (DIS) or redemption form. To get redemption form you can create a ticket in PRISM. You need to fill all the required info and courier it to our corporate office. If you still have any query, please inbox your client code someone from the team will get in touch to explain the process in detail. Regards
Thank you
 

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