The Process of Pledging shares in Zerodha is quite simple and user friendly. There are just few steps you need to follow to pledge your share in Zerodha. We will take you though the process How to Pledge Shares in Zerodha? However, Before that let’s check out what is pledge of shares?
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What is Pledge of Shares?
Many users have shares and ETFs in their portfolios, but will have less cash margins, this is causing them missing out the trade opportunities. In these kind of cases, they will pledge their stocks/ETFs for leverage margins, which they will get after a haircut of a percentage.
The leverage margin collected from pledging can be used to trade equity intraday, futures, and options writing. At the close of every business day, the leverage margin will be measured through cost changes in the total leverage margin. They can be recheck it in Console under Portfolio> Holdings.
How they calculate the Margin for Pledged Shares?
The collateral value will be determined using the shares’ previous closing price after haircut and related to the overall margin present on Kite. The collateral margin obtained is displayed individually under the collateral heading in Kite’s Funds section.
Now let’s Check out how to pledge the shares in Zerodha?
How to Pledge Shares in Zerodha?
First, you need to Log in to your Zerodha’s account on Kite app or Kite website. To Pledge your shares you need to note that their will be % of Haircut will be deducted on total amount if your pledge your shares. You need to call Zerodha customer care to check out the % before pledging.
Let’s Check out the process step by step:
Process
- Enter the Console.
- Go to the Holdings section of the page. This page displays a list of shares that can be pledged.
- Click on three dots to find the option of pledge for margin as shown in the above image.
- Choose the share you want to pledge, enter the amount, and press pledge.
- CDSL sends you an email with a link to accept the pledge to your verified email address
- When you click on the link, you’ll be given the option to create an OTP. The OTP is then sent to the listed phone number and email address. To accept the pledge, submit the OTP on the CDSL page.
- Margin will be issued against the pledged equity from T+1 after the pledge is accepted.
Also Read: Pledging of Shares
Note
Zerodha will offer real-time margins towards pledge once the complete APIs are accessible from CDSL Which is undress right now.
Zerodha Interest on Pledged Shares
You can checkout the fee by clicking here. This is because the depository charges a fee to establish the pledge and un-pledge.
Also, keep in mind that as a customer, you’ll be required to keep a 50:50 cash:collateral ratio, lacking it you’ll be charged interest.
If you are unable to fulfill your margin commitments, the broker has the option to invoke the pledge and sell the securities to earn back the funds owed to you.
How to Unpledged Shares in Zerodha?
To unpledge, go to the holdings section and submit an unpledge order. The shares will be unpledged from the Clearing Corporation (assuming they aren’t barred for margins), which means the shares’ lease will be removed and they will become unrestricted equities in the demat.
Conclusion
Pledging share is not a quite popular option in Indian market. However, you should use it wisely or avoid using it till the time you can mange.
This is all about How to Pledge Shares in Zerodha? Let us know your views about can i sell pledged shares in zerodha in the comment section.
Other Interesting blogs related to How to Pledge Shares in Zerodha?
What is Convert Position in Zerodha?
FAQ About How to Sell Pledged Shares in Zerodha?
How to sell pledged shares in Zerodha?
To Sell the Pledged shares in Zerodha you must unpledge them from CDSL first.
zerodha interest on pledged shares?
You can read this blog to find out Zerodha Interest on Pledged shares
Can I sell pledged shares in Zerodha?
No, You cannot sell them before unpledge them.
How to check pledged shares?
Log in to console and Checkout the holding option. You can find the all the shares with your pledged shares.
How they calculate margins for Pledged shares?
Margins will be calculate according to the total number of shares you are pledging.
