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after the pledging of margin of stocks 50/50 cash or cash equivalent is needed which is bummer when trading with bigger capital. There are brokers present in the current markets already where they offer 100% collateral use of margin for intraday f&o trading and 50/50 for overnight. With that separate wallet for mcx & equity is also makes it difficult for us to use the same margin aftr indian market closes into the mcx which is like problematic from both sides.
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Hi @Ray ,
Please note you can use 100% collateral margin even without maintaining 50:50 ratio. However, a nominal interest of 0.05% per day will be charged on the cash margin shortage. You can read more about it here: What is Margin Pledge? - Upstox Help Center
Also, we appreciate your feedback about having single wallets and have forwarded it to our team. Thank you for sharing your thoughts!
Is the interest charged is for overnight position holding or intraday positions as well?
Hi @Ray ,
Please note, interest wonāt be charged if margins are used for intraday trade.
You will be charged interest only for carrying it overnight. We hope this helps.
Lets say i have pledged 10,00,000 and got a margin of 8,00,000. Can i use this entire 8,00,000 for intrady options without adding additional cash.
And if that is possible do i have to put the order in delivery or intraday?
Welcome to the Upstox Community, @Sai_Santosh
According to regulatory guidelines, securities pledging typically requires a 50:50 ratio between Cash and Collateral.
However, starting October 2023, we have introduced a provision allowing 100% collateral without the need to maintain this ratio. As per your aforesaid example, you can utilize the 8,00,000 for delivery trade.
Selecting intraday product type is not allowed as per RMS policy. However, you can place the order by selecting delivery in product type and can square it off the same day for it to be treated as an intraday order.
If you wish to carry forward the position and do not square off the same day, then a nominal interest rate of 0.05% per day will apply on any shortfall in cash margin, based on the 50:50 cash collateral ratio.
We encourage you to go through our help center articles for more details on pledge margins, visit uptx.to/marpleg and find FAQs at Pledge & Unpledge - Upstox Help Center. Our RMS policy is available at https://uptx.to/RMS_Policy. This will help you in taking informed decisions.
If you have any further questions, feel free to contact us.