Hi Upstox Community,
I’m writing to bring to your attention a couple of issues I’ve been facing with Upstox regarding margin trading and pledge facilities.
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Firstly, I’ve noticed that Upstox deducts a significantly higher margin haircut (around 20%) than other brokers like Dhan and Zerodha, who only deduct around 9%. This difference severely limits the margin available for trading and puts Upstox users at a disadvantage. I believe a 20% haircut is excessive and urge Upstox to reconsider its policy and align it with industry standards.
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Secondly, the pledge facility on Upstox seems quite restricted. Many scripts available for pledging on other platforms are unavailable on Upstox. This limitation hinders the effective utilization of the pledge margin and reduces traders’ flexibility. I request that Upstox expand its range of pledgeable stocks to provide a better experience for its users.
I’m hoping that by raising these concerns in the community forum, we can bring them to the attention of the Upstox team and initiate a positive change. I believe addressing these issues will significantly improve the trading experience for all Upstox users.
Please share your thoughts and experiences on these matters.
Thanks!
Vivek
HI @Vivek_Raj,
Thank you for sharing your feedback.
Regarding Point 1 - We will revisit the haircut of scrips and in the first iteration would try to provide some scrips like Liquid ETFs as low as 6% and take from there onwards
Regarding Point 2 - We make all the stocks eligible which exchange has marked as eligible to be pledged. However, some scrips which are eligible make become blocked if the broker limit or global limit at exchange has been exhausted. In such case, we show this info on the margin pledge portal as well as the downloadable list of eligible scrip.
On a separate note, we have recently started MF pledging and will be enabling all MF scrips soon.
Hope this helps.
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Hi Abhishek!
Thank you for your response, but I’m still not satisfied with the explanation.
I’ve done some further research and found some significant discrepancies that I’d like to bring to your attention with all due respect.
Point 1: Haircut Discrepancies on Major Scrips
It is not about only liquid ETFs, I’ve noticed that Upstox applies a 20% haircut on many prominent scrips like MARUTI, HDFCBANK, ITC, and others (see Table 1 in the attached screenshot; the full list has as many as 48 such companies).
Your competitors only apply a 9-12% haircut on these same scrips.
This puts Upstox customers at a significant disadvantage, as we have to lock up more capital for the same amount of margin.
Could you please explain the rationale behind this discrepancy?
Point 2: Lack of Margin on Certain Scrips
I also noticed that Upstox doesn’t provide any margin or applies a 100% haircut on 21 companies (see Table 2). Other brokers offer margin against these scrips with haircuts ranging from 25% to 50%.
This seems like a major limitation for Upstox users, as we’re unable to utilize these holdings for margin trading.
How can Upstox justify this lack of margin facility when its competitors, even newer ones, offer it?
I believe these discrepancies need to be addressed to ensure a fair and competitive trading environment for Upstox customers. I look forward to your further clarification on these matters.
Thank you,
Vivek
Hi @Vivek_Raj,
We have noted your pointers and are currently looking into it. Will get back with an answer soon, thanks.
