Maximizing Trading Potential: How to Use Collateral Margin for Equity Delivery

General
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How This Feature Helps You Trade Smarter

Example Scenario: With and Without Collateral Margin

Imagine you want to buy shares worth ₹50,000. Without this feature, you would need the entire amount in cash. With collateral margin, if you have ₹10,000 in cash and ₹40,000 in pledged holdings, you can still place the order without waiting to add more funds.

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  • To take advantage of the feature, pledging existing holding is required.
    Learn More: How to Pledge Holdings for Collateral Margin and related FAQs

How to Activate and Use the Feature

  • No activation required – The moment you pledge your holdings, collateral margin for equity delivery is automatically available.
  • Pledge your holdings through the Upstox platform.
  • Your buying power increases, allowing you to purchase stocks without needing the full cash amount.
  • The collateral margin works seamlessly alongside your cash balance, ensuring smooth transactions.

Learn More: About the implications and scenarios related to Margin usage for equity delivery

Why Use Collateral Margin?

  • Trade with Higher Buying Power – Expand your trading potential by combining cash and collateral margin.
  • Greater Flexibility – No need to sell existing holdings to fund new purchases.
  • Faster Access to Funds – Pledge your stocks and get margin within minutes.

Important Considerations

While this feature significantly enhances trading power, users should be aware of a few key implications:

  • Delayed Payment Charges (DPC): Any unpaid balance on shares bought using collateral margin will incur charges until settled.
  • Liquidation Risk: If the pledged holdings fall below 70% of the debit value, liquidation may occur to recover outstanding balances.
  • Active Monitoring Required: Keep track of your pledged holdings to avoid unnecessary liquidation.

Take Control of Your Trading Strategy

This update is designed to empower traders with greater flexibility, faster execution, and increased capital efficiency. Whether you’re a swing trader, a BTST trader, or an experienced investor, this feature ensures you can make the most of every opportunity.

What do you think about this enhancement? We’d love to hear your thoughts, questions, or feedback!