In this article we will discuss how to pledge your portfolio so basically today you will understand how you will calculate the margin and charges and all small question about the pledging.
So welcome friends in our short series F&O shorts in which you will learn how you can start hedging strategies where you can get a return of 24 to 36% yearly without taking any additional risk so let’s start.
First understand the process of pledging. How you will have to do the pledging.
You can understand the process of Zerodha or you can talk to any other brokers to get the support and you can also check out from online.
First when you pledge the shares, such shares should exist in your demat account or the mutual fund should be there in your demat account so when you go to your demat account and check your portfolio, go to your holdings in which you can find all the shares which are there and mutual fund which are there. Now as I told you in previous article that you cannot pledge all the shares or mutual fund and also you cannot pledge tax saving mutual funds. So, for example, you want to pledge Reliance share then in holding you just have to reliance share and then click on the bar mentioning “Pledge for margin “and then you have to put the number of shares that you want to pledge. Once you generate then an email will be sent to your registered Email Id which will come from CDSL who are the demat account holders from zerodha in which they will ask you to authenticate for pledging of your shares. Once you authenticate, you are ready for pledging. Once you click on authenticate then a new page will get open of CDSL in which you have to submit your PAN Number or Demat account number and OTP will be sent to your registered mobile number and your mail id. Once you authorize using that OTP then Pledging will be done and if you come back to your Demat account again then you will see one small block which means that it is already pledged and the same is reflected in your find position.
So this is the first part which we call it the process part.
Second part: how to calculate that how much margin you will get and how many lots you can take and basically how many lots you should take? So I have just take you in step number 5 but before I will recommend that you should read my previous article or you can watch out video from you tube in which I have explained that different mutual fund and different shares have different margin capacity so if I say you have 10 Lakhs rupees of capital and you have put 4 lakhs in some mutual funds or some equity or some shares and 4 lakhs as cash in your dmat account and 2 Lakhs as hard cash so in equity generally you will get a margin of 80% so you will get the margin of 3.2 lakhs and on liquid funds, generally you will get the margin of 90%. It will keep changing on day-to-day basis as the market moves. Now, Suppose you have the available margin of 8 Lakhs and you are doing only F & O Strategies like I do and for the ease calculation you can do the F & O trading of 1.25 Lakhs then simply you divide the per lot margin with total margin then you will get the number of lots which will be maximum 7 lots and always have 50% of lots you have to placed that means if you have the capacity to take the position in F & O of 7 lots then you should do with 3 lots and keep the margin of 4 lots for adjustment. Always keep this in mind.
Second thing, if you are only dealing in options and in some cases, which I know the per lot margin is Rs.25000. In that case, you can have a bigger lot size, so you can basically take the 35 lots as per the above calculation and then you should pledge only 17 lots and rest 17 lots you should keep for adjustment.
This is the second part that how you can calculate and how you can understand your position size. Always have the 50% position size of the maximum size of lots with the margin.
Now third important thing people ask about the charges. So, in Zerodha, what I know, in Zerodha, it only charge 30 rupees for pledging and no charges for unpledging. Now, most of the people ask me that if they are giving us the margin then whether they will also charge any interest so let me tell you that you should have enough cash in your cash account and if you have debit balance then there will be delayed payment of interest @ 0.05% per day applicable of the debit amount. So if you take a position that require a margin of Rs. 1 Lakhs, you need at least Rs.50000 in cash irrespective of how much collateral margin you have. Assuming you do not have this Rs. 50000, whatever you are short by will be debit balance for the day and delayed payment(interest) charges will be applicable for that amount.
So only if you are going to use to exceed your cash margin then only they are going to charge otherwise only there is 30 rupees with GST per pledge request. No cost for unpledging. So this cost will be per request and suppose you have different companies shares then different amount will be charge as per share wise.
So that’s all for this article. I have created lots for thing to you and this way you can get pledge and get margin to start your journey as F & O investor.