In consonant with our philosophy at TradeSmart to bring in new products and services which will prove beneficial to your online stock trading, we take this opportunity to announce the introduction of Margin against shares (MAS) services.
What is Margin against shares?
Margin against shares is basically a value added service. It allows you to get exposure/ margin against shares in your demat account by keeping them as collateral. The collateral value of these shares is calculated after applying a hair-cut.
The total limit provided for trading under this feature is subjected to having Cash to Collateral ratio of 40:60. This means that to get the complete benefit of your collateral, 40% of the margin will have to be in cash.
Let us take an example: ABC has cash balance of Rs 40,000 in his account and has pledged shares worth Rs 1 lakh of ACC for margin benefit. If the haircut for ACC is 15%, then the collateral value of the shares after hair-cut will be Rs 85,000. Since the the total limit provided will be in the ratio of 40:60, ABC will get total limit of Rs 1,00,000 (Rs 40,000 cash + Rs 60,000 collateral). In other words, the collateral value is equal to 1.5 times of your available balance, i.e 40,000*1.5=60,000. Hence, your total amount available for online stock trading is 40,000 + 60,000 which is Rs 1,00,000.
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Is margin trading helpfull to cut down fake online traders in stock market?
Also Read : Margin against Shares (MAS) in Demat Account: Real Significance to Know
Formula for calculating collateral value after Hair-cut:
(Quantity of the stock pledged x Last trading price) x (100% – Haircut% for the stock)
Check the hair-cut percentage for various scrips on our website.
Before explaining the process to get margin against your shares let us discuss few of the features of MAS.
- Segments & product types available for MAS:
Segment Product type Cash MIS, CO, BO F&O MIS, NRML, BO, CO Currency Derivatives MIS, NRML, CO MAS will not be available for buying securities in CNC and for buying Options contracts. Also, MAS will not available for online trading in the commodity segment.
- List of scrips available for pledging under MAS: The list of scrips available for pledging under MAS has about 850 stocks in it. This list is decided as per TradeSmart’s internal risk policies. It will be reviewed periodically and updated accordingly.
- Charges: There shall be Rs 15 for pledging and Rs 15 for unpledging + GST charged per scrip per day irrespective of the quantity. So if you have pledged 100 quantity of Reliance and 200 quantity of ACC you will be charged Rs.30 (15*2) exclusive of the GST. The pledge charges will be debited from your ledger the day you place the pledge request. Similarly, the charges will be applicable for unpledging.
- The valuation of pledged shares after Hair-cut will be shown under “Collateral value” column in “RMS View Limits” report in NEST Trader and NEST web. In Sine app and Sine Web, the valuation of pledged shares will be shown under ” Stock Valuation” column in “Trading Balance” report.
- Selling Pledged shares: Pledged shares could not be sold directly without unpledging.
- Payin benefit: For funds(pay-in)transferred during market hours, the cash to collateral benefit of 40:60 ratio will not be made available on same day.
- Delayed payment charges (DPC):
- For F&O and currency trading, the Exchanges accept 50% margin in cash and 50% in shares. The collateral received from you will be given to the exchange against your margin requirements. In case of derivative carry forward positions, at the end of the day if cash margin is less than 50% of the margin utilized, DPC @ 0.05% per day will be levied on the amount funded by us to maintain the cash:collateral ratio at 50:50.
- For Cash segment the delayed payment charge @ 0.05% per day will be levied on the total ledger debit. If there is no ledger debit at the end of the day, these charges will not be levied
- Let us understand DPC by an example
Assume available cash = 40000, share value = 1,00,000, share value after haircut of 15% = 85000. According to 40:60 ratio, Trading limit available is 100000 i.e. 40000 cash + 60000 (1.5*40000) from collateral. If, the trader utilizes the entire amount of Rs.1,00,000 for trading, then- DPC charge for Derivative contracts:
As mentioned above, cash to collateral ratio is taken as 50:50. The cash to collateral amount reported to exchange will be 80,000 (Cash = 40,000 and Collateral = 40,000). The DPC is charged on 20000 that is the difference of position created (100000) and amount reported to exchange (80000).
- DPC charge for equity trading:
Only available balance is reported to the exchange (40000). With position of 100000, the DPC is calculated on a shortfall of 60000 (100000 – 40000)
- DPC charge for Derivative contracts:
- Corporate Action: In case of any corporate action (except rights issue) for pledged stocks the benefits of corporate action will be transferred to you.
Where to view collateral benefit in the trading terminal?
Collateral benefit could be viewed in NEST Trader in RMS View Limits> Collateral Value
Also Read : Sine Web – The Intelligent Web-based Trading Application
How to pledge the shares for margin?
The request for share pledging has to be placed through our backoffice BOX. All pledge requests received till 2.00 pm on trading days will be processed the same day and the benefit will be available for online stock trading the next trading day. Any requests received after that will be processed on the next working day.
How to un-pledge the shares?
Shares could not be automatically unpledged if you sell directly from the terminal. The shares given for pledging need to be un-pledged from BOX. All unpledge requests received till 2.00 pm on trading days will be processed the same day and will be shown in your holdings within a day. Any requests received after that will be processed on the next working day.
However, if you have used margin against your collateral or if there is ledger debit in your account, then the unpledge request will be rejected.
Pledging and Un-pledging request received on working Saturday before 12.00 pm will be processed on the same day and the benefit will be available for online trading the next trading day.
We are confident that it will benefit you with online trading. We will continue add new features to this as we go forward. Please feel free to post your queries/suggestions in the comments section below and we shall make sure that they are answered at the earliest.
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What is hair-cut?
Hello Sandy,
Since the stock prices keep changing every second how do we value a stock?
Well, we take help of a parameter called hair-cut. This means, based on the risk in any stock we discount the value of the stock by that much amount for the purpose of valuation.
Ex: Let’s say a stock’s market rate is Rs 100 and the haircut percentage is 15%. Then the value of stock will be considered at Rs 85 (Rs 100 – 15% of 100) for the purpose of collateral value.
Ha sir your trade charge is more to other broker . You take value trade charge but other take only brokerage charge why
Hello Pradeep
There seems to be a misunderstanding. What exactly do you mean by value trade charges? Can you please give an example?
I pay value trade charge Rs. 15 but sharekhan is not take value trade charge he take broking charge only my Id no. YUPP60. you want to checks
Hello Pradeep,
As per your telephonic conversation with one of our executive, your query regarding Rs.15 demat transaction charge, is resolved to your satisfaction. You can also take the help of online chat support available on our website for any query.
it is applicable for now trader also or not
Hello Dr N K Babu,
Share pledge service is not applicable to NOW traders. You may shift your account to NEST trader in case you want to avail this service.
Don’t you think the charges for pledging is too much i.e Rs.60 per script. where as the normal broker do not charge anything for this facility. Then why are you charging?
Hello Piyush,
As we are a discount broking firm and charge you very less brokerage as compared to other brokers. We charge a very nominal of Rs.60 for pledge and also no cost involved for unpledge.
[…] case you want an extra intraday exposure with less margin then you may use Margin Against Shares. You can also refer EquiMax product to get higher exposure in equity […]
TSO is not fit for pledging. Rates are super high.
There seems some confusion here. We charge just Rs.60 for pledging shares for availing higher intraday exposure in your trading account. In case you want to pledge shares in any bank for taking loan then the pledge charge would be Rs. 200. Hope we addressed your query.
trading software and app is very poor……
kabh holding dikhate hai ya kabhi bhi holding gayab ho jati hai…..
Hello Vinit,
As per your conversation with one of our executive, it seems that you were trying to get the data on weekend. Your transaction details will not be uploaded in the trading software on weekends. However, on weekends you can see holdings in BOX back office.
[…] We also provide Margin Against Shares. […]
Can we buy and pledge liquid bees and what is the haircut
Hello Harish,
Currently, we do not allow liquidbees for pledging. However, we are working on this.
[…] Also Read Now Pledge your shares for extra margin […]
Margin is avail in holding without pledging of share or not and rs60 is one day charges only or for month
Hello Rajendra,
To get the higher exposure, you are required to pledge the shares which are there in your demat account. Without pledging, extra exposure cannot be availed. Rs.60 is charged only when you request for pledging. We don’t charge when you unpledge the same shares.
Devidas
What is your levies percentage ? Because I earn Rs 720 in intraday trading but deduct (levies) Rs 544 in contract note and only Rs 176 credited in my demate account.
Hello Devidas,
Kindly refer our statutory charges levied apart from brokerage. In your case, you have selected Rs.15/order plan. In this plan Rs.15 is charged on each executed order that you place, irrespective of the quantity in one order. You have placed multiple orders in a single day on which you have been charged 544. In case you trade small volume then you might change your brokerage plan to 0.7 paise plan. We will also arrange someone to explain in detail about the brokerage plans.
how can I transfer my shares to my VNS account from my account with another broker and what will be the charges thereof?
Hello Muhammad,
You must have received DIS (Delivery instruction slips) while opening account with other broker. You need to fill in DIS issued by other broker and attach Client Master Copy(You can download from BOX > My Profile section) of VNS account and submit with that broker. There will be no charge from our side. You need to check with that broker if there are any charges applicable.
Do you accept liquidBees as cash equivalent (for the 50% cash margin requirement for overnight F&O positions)? Will I have to pledge the liquidbees or simply having liquidbees in my demat is sufficient? What other forms of cash equivlalent margin you accept (Bank FD etc?). Please provide details.
Hello, can you please answer my question above?
Hello Abhay,
Sorry, liquid Bees are not accepted for margin. Also Bank FD cannot be accepted as cash equivalent.
[…] Stock Pledging for Margin against shares […]
[…] Margin Against Shares […]
Hello,
Can you explain me amount i have to pay on for pledge share.
If i Pledge 100 share of PNB bank Value is 10000
for single pledge, first i have to pay 60Rs (reply is it ok? )
Second Now How much margin i get on that pledge share, that is 40000 amount. (reply is it ok? )
And now with 40,000 margin, i bought shares in CNC delivery & i bought reliance shares of 40000.
NOW as per my plan, i have to pay
15 RS as brokerage fix for single buying, second how much time i am keeping reliance share, that much margin charges… will also apply. (reply is it ok?)
Can you know me for one day, how much i have to pay margin charges on reliance share.???
Thanks & Regards,
Sachin DUA
Plz send MAS of pdf to my mail I’d
Dear Nikhil,
You can activate MAS by logging into BOX. Please let us know if you require further help.
1. Make search common for all equity, optikns, future in single search like zerodha.
2. Why current LTP not showing in position or during modify .
Please add
3. Whats ur tweeter handle and email if for feedback
[…] Also Read: Now pledge your shares for extra margin using Margin Against Shares Feature […]
Commodity me intraday marjin kitna hai
जैसे की आस्था ब्रोकर में 2000 का क्रूड ऑयल का लॉट मिल जाता है जिंक और लेट 5000 में पर लौट गोल्ड 10000 पर लो ट क्या ट्रेड स्मार्ट ऑनलाइन में भी ऐसा हो सकता है
Hello Dharm Singh,
Please refer our another article on Intraday Exposure in all segments. In case of any query, please let us know.
In zerodha they will close the open position after 3:20 PM but in tradesmart online also they should give time to the intraday trader’s till 3:20pm
Hello Srinivasulu,
Intraday timing is decided based on the risk parameters that need to be considered while squaring off the open positions of clients. However we shall look into it.
Do you accept liquidBees as cash equivalent (for the 50% cash margin requirement for overnight F&O positions)?
Zerodha is doing it. If you can, you will find a lot more clients joining you like me.
Hello Rohit,
Currently we do not accept liquidBees as collateral because, the interest from Liquidbees comes in the form of dividend units. To know which account the dividend should be credited to, they check in which demat account the Liquidbees units were at the end of the day. This means, the dividends would go to the Clearing Member with whom the units are pledged. The dividend units then need to be redistributed to the various clients. Currently, our backoffice does not have a provision to do that as these units are fractional units. Moreover, the daily interest rate was not available in the form of a file. So it had to be entered manually and hence prone to error. However, we’ll check if there are any new developments which allow us to accept Liquidbees too for margin purpose.
Hi If you do not accept liquidbees as collateral, is there any other option in which we can invest & that would be equivalent to cash margin with minimum haircut
Hello Mukul,
Currently there are no other options in which liquidbees are considered as collateral. However, we shall check this further and know if we can do something for this.
If I take delivery of say 10 shares of Asian Paints for 1 year from the margin money following proper cash to collateral ratio, will I be charged any interest by VNS on the delivery
Hello Rupesh,
In case of equity trading, MAS feature is available only in intraday products. For taking delivery of stocks you need to pay full value of the stocks.
Do you allow To pledge Liquidbees for availing margin agains shares. If allowed, will that be treated as cash margin. Also please clarify, whether Bharat Bond ETFs are accepted as collateral for pledging.
Hello Jegadish,
We do allow Liquidbees for pledging and it is treated as cash margin. Kindly refer to the list of stocks that are available for pledging.
Charges mas ?
There shall be Rs 15 for pledging and Rs 15 for unpledging + GST charged per scrip per day irrespective of the quantity.
PLEASE EXPLAIN
YMHM52
Hello Omprakash,
Hope below example will help you to understand better.
Assume you have pledged ABC share and XYZ share on 1st Oct. On 1st Oct you will be charged Rs 30 (15 for ABC and 15 for XYZ). If you unpledge ABC share on 20th Oct then you will be charged Rs 15 again on 20th Oct. If you unpledge XYZ stock on 25th then on same day you will changed Rs.15 for unpledging.