Margin Pledge Interest

Margin Pledge Interest:   Pledge Shares lets you pledge your existing stocks (from the approved list) with your broker to get funds or margin for trading. A small deduction called a haircut applies (each stock has a set percentage as per the broker’s risk policy). For example: If you want to buy shares worth ₹1 lakh but don’t have enough cash, and you have stocks worth ₹1.25 lakh in your Demat account, you can pledge them. If the haircut is 20%, you’ll get ₹1 lakh as margin. While, interest of 9.99% p.a.  is applicable on Margin pledge as an when you utilize the collateral limit. So, if you take funding worth ₹100, you will pay 9.99% interest in a year, which is 0.0274% in a day. To elaborate, here are 3 scenarios: Value of existing stock portfolio Haircut Funding received after haircut Margin Pledge Interest payable (9.99% p.a.) ₹10,000 10% ₹9,000 Rs.899 ₹1,00,000 15% ₹85,000 Rs. 8492 ₹10,00,000 20% ₹8,00,000 Rs.79920 For more details, please refer below link: https://www.mstock.com/margin-pledge   For additional clarity, please refer to the video: https://youtu.be/ZuiIqz8asxc  

 1. What are the pledge timings and when will I receive margin in my account? Your margin will be added to your Available to Trade balance instantly on the same day. Pledge Request Timings (Trading Days Only): Pledge: 9:00 AM to 7:00 PM Unpledge: 9:00 AM to 3:30 PM Note: The collateral margin will be displayed Under Menu > Intelligent Repots > Fund Summary > Pledge Shares Margin   Unpledge requests cannot be placed on the same day they can only be placed on the next day.

 2. What is the Margin Pledge creation and closure charges? Margin Pledge creation charges remain 0 whereas closure charges will be Rs. 32 + GST per request.

 3. How to place pledge request: Please follow the below steps to place pledge request: Web: Login to m.Stock web > Click on Menu > Instant funding > Pledge Shares > Pledge Now   OR Login to m.Stock web > Click on Add Funds > Pledge Shares > Pledge Now   OR Login to m.Stock web > Click on Portfolio > Select Equity/ETF > Click on Pledge Shares > Pledge Now App: Login to m.Stock app > Click on Menu > Instant funding > Pledge Shares > Click on Pledge   OR Login to m.Stock app > Click on Add funds > Select Pledge shares > Click on Pledge OR Login to m.Stock app > Click on Portfolio > Select Equity/ETF  > Click on Pledge Shares> Select pledge • Choose stocks to be pledged from list of approved stocks in your Demat holdings • Enter pledge quantity and click on ‘pledge’ • On the CDSL page, validate pledge request using OTP Note: DDPI is mandatory to avail Pledge Shares facility.

 4. How to access Pledge report? To access Pledge Shares report: Login > Menu > Intelligent Reports > click on Pledge/Unpledge > Pledge report   

5. Margin From Pledge shares can be used in which segment? Margin from pledge shares will be available instantly and can be utilized for taking positions in Intraday, Futures, Options, and Pay Later (MTF). However, it cannot be used for delivery trades. 

6. Will my shares be transferred to the m.Stock if I pledge? No, your shares will remain in your Demat account. You will simply have to mark a pledge on your shares in favour of m.Stock. When you close your position, these pledged stocks will be unpledged. 

7. What is haircut? Why is it deducted? Haircut is the amount deducted from the total value of a stock. This protects the broker from unexpected price movement and volatility. Every stock has a pre-decided haircut percentage as per the broker’s internal Risk Management policy. For instance, if the total value of stocks in your portfolio is ₹1 lakh and the stock has a haircut of 10%, then the broker will give you ₹90,000 as trading margin. 

8. Is haircut same for all stocks? No, haircut percentage differs from stock to stock, depending upon stock volatility and the broker’s internal Risk Management policy. The broker can increase or decrease the haircut % on stocks basis internal risk assessment without any further intimation to clients. 

9. Can I sell pledged stocks? Yes, you can sell pledged stocks, without any restrictions. 

10. When will I start incurring Margin Pledge interest charges? Margins or limits will be added to your m.Stock account instantly (after Pledge Shares request is raised). However, interest will only be charged in case you use this margin and have your position in margin shortfall.   For example, you pledged stocks and received ₹1 lakh margin on 1st July. However, you did not use this margin till 10th July. On 11th July, you utilize ₹80,000 to place a trade. In this case, interest will be calculated on ₹80,000 only starting from 11th July. 

 11. Are there any square-off charges for Pledge Shares? Yes, for every auto square-off request, a fee of ₹100 +GST is applicable. 

12. Can I pledge corporate bonds? Corporate bonds are not eligible for pledging. Only existing stocks from the approved equity list and selected ETFs can be pledged.   You can refer to the list of stocks available to pledge from below link: https://www.mstock.com/margin-pledge/margin-pledge-stocklist 

13. How to unpledge shares? Please follow the steps below to unpledge the stocks from Margin Pledge facility:   Web: Login to m. Stock web > Click on Menu > Instant Funding > Pledge Shares >Pledge Now> Unpledge > Choose stock > Enter quantity > Unpledge > CDSL validation.   Or   Login to m. Stock web > Add Funds > Pledge Shares > Pledge Now > Unpledge > Choose stock > Enter quantity > Unpledge > CDSL validation   App: Login to m. Stock app > Click on Menu > Instant Funding > Pledge shares >Select Unpledge tab > Choose stock > Enter quantity > Unpledge > CDSL validation. Or Login to m. Stock app > Click on Add funds > Pledge shares >Select Unpledge tab >Choose stock > Enter quantity > Unpledge > CDSL validation