Margin Pledge is a way to get more funds for trading by pledging existing Stocks, SGBs, ETFs etc. For instance, if one of your Stocks is trading at ₹100 and you pledge that Stock, you can get up to ₹85 for trading.
Recently, we’ve revamped our Margin Pledge feature to help you boost your trading power and improve your trading experience.
Here’s what we have added:
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Pledge Mutual Funds as collateral
Along with Stocks, ETFs and SGBs, you can now pledge your existing Mutual Funds and get margin for trading. -
Equity Intraday Trades
Margins against Stocks, ETFs, SGBS and Mutual Funds can now also be used for Equity Intraday trading. Earlier this margin was only available for F&O trading. -
Quick & easy pledging
Your pledging requests will be instant and the margin will be credited to your Upstox account within 15 minutes. -
Option Buying
Earlier, only Futures buying/selling and Option selling was possible with margin from Margin Pledge. Now you can use it to buy Options as well. -
No 50:50 cash-to-collateral ratio for F&O trades
Earlier, while using margin for overnight F&O positions, it was compulsory to maintain 50% amount in cash and a 50% amount in collateral margin. Now even if you don’t maintain this ratio, it’s alright.
You can use 100% of the collateral margin from pledging for your F&O trades without needing to maintain an equal cash-to-collateral ratio. If you don’t meet the 50:50 ratio, simply pay a small interest of 0.05% per day on the cash margin shortage.
And if it’s an intraday trade, there’s no need to pay any interest.
Why use Margin Pledge
- Take bigger trading positions without new capital
- No more missed trading opportunities due to a lack of funds
- Enjoy low-cost pledging starting at just ₹20/order with no paperwork
Here’s how Margin Pledge works:
Let’s say your holdings are worth ₹1,00,000 on Upstox. You wish to trade in F&O or place Equity Intraday trades worth ₹90,000, but you don’t have enough funds. With Margin Pledge, you can pledge your holdings as collateral to get funds for trading.
Why don’t I get the entire 100% worth ₹1,00,000 for trading?
Because markets keep fluctuating and to prevent brokers from the risk of losses, SEBI advises brokers to levy a haircut on the pledged amount. In the above example there’s a ₹10,000 haircut applicable on the pledged amount of ₹1,00,000.
How to use Margin Pledge
Using Margin Pledge on Upstox is easy-peasy. To get started, watch our video here https://youtu.be/9rdxVbTomXM
What else to keep in mind?
- Margin Pledge is applicable on selected stocks only. You can refer to the link here: LINK.
- On pledging Stocks, you will continue to receive benefits of corporate actions such as bonuses, dividends, splits and others.
For a detailed guide, please refer to our Margin Pledge Policy and FAQs.