I pledged LIQUIDCASE and using the margin to buy stocks. The cash collateral available is more than the funds I used to buy the stocks, still I am getting mails to add funds.
Does the margin from pledging, despite being cash collateral used only to place trades? How much of pledged margin is used as funds when buying, and how much funds should be added, 75% and 25%?
There is haircut, and margin is considered as cash collateral, still some funds are to be added. Cash collateral not considered as full cash?
I read few posts, but still there are doubts. Request Dhan team to clear my doubts. I want to continue using margin.
@Mohseen_Usmani @Sameet
@Trader_FT Cash collateral cannot be used to purchase stocks for overnight delivery in the cash segment if that is what you are trying to do.
It is primarily used to block margins for intraday equity trades, futures and options (F&O) writing, and for maintaining overnight F&O positions.
If you wish to take delivery of stocks without significantly reducing your cash balance, you’ll need to use the Margin Trading Facility or MTF.
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Thanks for the reply.
I used MTF few times, it was fine.
I want to know how much funds I have to be ready with, so that I don’t miss the deadline of 8 the next morning. Not all funds I use is asked to be added.
There is also the issue of some delivery sell benefit coming the next day.
I would like to know from the team if there is any % or calculation that can help me prepare in advance how much to be added.
@Mohseen_Usmani
For MTF bought on collateral money, whole funding is provided by the broker on which interest is charged and, for buying in delivery as @t7support mentions whole funds 100% needs to be in cash to avoid ledger going negative and you have to add Funds to keep your ledger positive.
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Yes, I used MTF. It was fine.
Pledging and buying stocks was not clear.
@Mohseen_Usmani
Hi @Trader_FT, here is an example to understand this better.
Suppose you have ₹50,000 as cash collateral and ₹10,000 in ledger balance. If you purchase NiftyBees worth ₹50,000 in delivery, the full buy value must be paid to the seller since it is a delivery trade.
As a broker, we facilitate this using your available collateral margin. On the next day, you will see a ₹50,000 debit, resulting in your ledger showing –₹40,000, while your cash collateral still remains around ₹50,000.
In this situation, you need to clear the negative ledger balance to avoid liquidation of holdings by T+5 days. Additionally, DPC (Delayed Payment Charges) at 0.0438% per day will be applied on the negative balance until it is cleared.
Hope this clarifies the process. If you’d like to understand this further, you can connect with us here: Contact Us.
Thank you.
Does it make a difference if I add funds immediately I receive the mail or if I add in 4 days. I get the mail on Monday night and I add funds on Friday?
When will the DPC start from? From the next day of purchase T+1?
Why does delivery sell benefit exist? Is this broker specific? If I get my funds immediately for all the stocks I sell, the ledger may not go negative at all.
@Mohseen_Usmani
It’s always advisable to add funds on the same day or by the next day before the market opens. DPC (Delayed Payment Charges) are calculated from the day your ledger turns negative, which is typically T+1.
CFS exists so that users can utilize funds received from selling portfolio holdings on the same day for trading, even though the actual settlement cycle is T+1.
Hope this helps clarify @Trader_FT