Before starting to understand what is StockPlus, let us have a look at what is trading with margin against shares:
What is trading with margin against shares and mutual funds?
As a normal practice, limits for trading in the stock market are given only against bank funds i.e. funds transferred from a client’s bank account. Using the money transferred from the bank to his trading account, a client can trade in all segments. However, the majority of the funds of a client are invested in stocks and mutual funds. Thus the money gets locked and even though clients have assets in the form of shares and mutual fund holdings, they are not able to make new trades. Thus to unlock this value hidden in the stock and mutual fund portfolio of a client, a client can pledge his shares and mutual funds to avail trading limits against these holdings. This concept of availing margin against pledged shares and mutual funds held in one’s demat account is known as “Margin Against Shares“. The cash margin required for trading is substituted with shares.
All the client needs to do is to pledge his shares with the broker to avail the credit against them. The broker will deduct a portion known as a haircut to adjust for the risk due to price fluctuation of the stock. For example, if a client has 10 shares of Reliance at a price of Rs 1000 making the total portfolio value of Rs 10,000 and the haircut is 40%, the client can get limit for only 60% of the total value of the shares i.e. Rs 6000. The client can trade for further Rs 6000 in his account.
If there are any debit or losses in the client’s account, such shortfall can be later adjusted by selling the pledged shares. All corporate actions for the shares like bonus’ or dividends belong to the client.
As all investors know, it is difficult to meet margin obligations when a large part of your Capital is locked up in shares lying in your Demat Account. This causes many traders & investors to scale down their trading or even lose out on trades that could have been immensely profitable!
Let us bring to you the perfect solution: SAMCO StockPlus!
What is StockPlus?
StockPlus is a complete margin-against-shares and mutual funds product that provides trading limits against your shareholdings for intraday and positional trading in the equity derivatives and currency derivatives segment.
With this product, you can use your Samco account virtually as a Zero Balance Trading Account.
What can we do with StockPlus?
Trade with Margin against shares with zero cash balance in the equity derivatives and currency derivatives segments (both intraday and positional trades) and also in the cash market segment (via bracket order and cover orders) with zero cash collateral ratios while initiating trades. You can initiate trades in options too with margin against shares (both long and short options - intraday and positional basis). You can sell your pledged holdings in real-time by placing a real-time sale request. You don't need to un-pledge holdings the previous day to sell them
With SAMCO StockPlus, you can get margins against shares you own to trade for Intraday trades and Positional trades.
You can initiate trades even if the cash available in your trading account is ZERO! Yes, that's correct! You'll get trading limits against your shareholdings only to trade across all segments. There's no requirement to maintain any cash/collateral ratios. StockPlus is a complete ZERO Balance margin against shares and mutual funds trading account.
Highlights of the StockPlus Product
- No need to maintain 50-50 cash collateral ratios while initiating trades
- You can initiate trades in Options too with margin against shares (both long and short options for intraday and positional basis)
- You can sell your pledged holdings in real-time by placing a real-time sale request. You don't need to un-pledge holdings the previous day to sell them.
- Get interest rebate on ledger debits to the extent of collateral value or 50% of exchange margins, whichever is lower. You can refer to this in the StockPlus FAQ's.
How to Subscribe StockPlus?
Clients can subscribe to SAMCO’s Margin against shares trading products by following these simple steps:
- Go to the Samco Star Back office.