As an investor you must have heard about the term “Margin against shares”, but only a few understand its actual meaning, let’s discuss this in detail:
What is trading with margin against shares?
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/her trading account, a client can trade in all segments.
However, the majority of the funds of a client are invested in stocks. Thus the money gets locked and even though clients have assets in the form of shares, they are not able to make new trades. Thus to unlock this value hidden in the stock portfolio of a client, a client can pledge his shares to avail trading limits against the shares.
This concept of availing margin against pledged shares 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/her 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 the price fluctuation of the stock.
For example, if a client has 10 shares of Reliance at the current market price of Rs 1000 making the total portfolio value of Rs 10,000 and the haircut is 40%, the client can get a limit for only 60% of the total value of the shares i.e. Rs 6000. The client can trade for a further Rs 6000 in his account.
If there are any debits 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 bonuses 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!
So to solve this problem, here we bring the perfect solution it’s called as Margin Against Share – StockPlus
What is StockPlus?
At Samco, we have given Margin Against Shares it’s own name which is called as StockPlus. Here you can pledge your sharesholding and mutual funds holding for intraday and positional trading in the equity derivatives and currency derivatives segment.
With this StockPlus, you can use your Samco account virtually as a Zero Balance Trading Account.
What can you do with Margin Against Share – 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 Margin Against Share – StockPlus:
- 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.
What products can I trade with margin against shares with Samco?
With the help of Margin Against Share, you can trade in Intraday Margin and Future & Options.
What are the benefits of using Margin Against Share – StockPlus?
|Suitable for||Intraday and Positional Traders|
|Product types allowed for trading||BSE – CM, NSE – CM – BO and CO NSE – F&O, NSE – CDS – All product types permitted|
|Sale of Pledged shares||Instant subject to live sale request which can be entered from Samco STAR Dashboard.|
|Subscription Fees||FREE for lifetime|
|Interest applicable||On Ledger Debit minus lower of (collateral value or 50% of F&O + CDS Margins)|
|Positions can be held for||No restriction. Positions can be carried forward as long as sufficient margin exists.|
|Checking Limits in Samco Trading Terminals||“Adhoc Margin” field in trading terminals|
|Pledge and Unpledged charges||Rs. 30+GST per request per ISIN Instant Sale Requests – Rs. 60+GST per request per ISIN|
|Number of Stocks available for Pledge||1,500+|
|Restrictions on Unpledged Requests||In case of Ledger Debits or Pending Instant sell requests|
|Holdings view in Samco Trading Terminals||Under “Withheld holdings Quantity”|
How can clients subscribe to Margin Against Share – StockPlus?
When you open an account with Samco, your Margin Against Share – StockPlus subscription is enabled for FREE.