Trade Smart Online

[TradeSmartOnline]

There should be a way out , a solution. I am categorically giving you the rights to sell my covered shares, if exercised. Why should be there be a grey area ?. So if i am called , i'll have to deliver,since i'll be selling only those calls which stocks i have.
Do all brokers in India follow your rule ? How do they manage , and why cant you? I dont like the idea to pay 60 rs plus cash to sell a covered call.

If you are writing an option the Margin has to be paid to the exchange. Margin can be 50% in cash and 50% in collateral. If the 50% margin is to be paid to the exchange then it has to be pledged and moved out if your demat account. For this activity the clearing member would be charging us. Hence the charge.

Moreover, the gray area could be there because there are many people who have stocks in their demat account. If we give a limit to all against those stocks then there may be some who are unaware of the leverage concept and trade in F & O. They might then suffer unintentional losses. This creates misunderstanding and disputes.

 

[RockyRobust]

If you are writing an option the Margin has to be paid to the exchange. Margin can be 50% in cash and 50% in collateral. If the 50% margin is to be paid to the exchange then it has to be pledged and moved out if your demat account. For this activity the clearing member would be charging us. Hence the charge.

Moreover, the gray area could be there because there are many people who have stocks in their demat account. If we give a limit to all against those stocks then there may be some who are unaware of the leverage concept and trade in F & O. They might then suffer unintentional losses. This creates misunderstanding and disputes.

@ TSO,

Is it maximum 50% or fixed 50%? If it is maximum 50% then what is the minimum %age?

Also one query is that I used to trade with India Bulls and got Margin Against Shares but there was never a requirement of pledging & unpledging. Are India Bulls themselves a clearing member or what could be the reason of this exemption ?

Thanks.

 

[TradeSmartOnline]

@ TSO,

Is it maximum 50% or fixed 50%? If it is maximum 50% then what is the minimum %age?

Also one query is that I used to trade with India Bulls and got Margin Against Shares but there was never a requirement of pledging & unpledging. Are India Bulls themselves a clearing member or what could be the reason of this exemption ?

Thanks.

Min 50% margin has to be in cash. Max can be 100%.

Not sure about others but if collateral is given to the exchange shares have to move from one account to another. Other brokers charge a higher brokerage and maybe that is why they were not charging separately for this.

 

[RockyRobust]

Min 50% margin has to be in cash. Max can be 100%.

Not sure about others but if collateral is given to the exchange shares have to move from one account to another. Other brokers charge a higher brokerage and maybe that is why they were not charging separately for this.

Oh ! what I wanted to say was that there was no requirement of any formal request to be made for Pledging & unpledging. The shares were always ready for being used as Collateral. If I could see the shares in my account I knew that they are ready to be used as Collateral.

 

[TradeSmartOnline]

Oh ! what I wanted to say was that there was no requirement of any formal request to be made for Pledging & unpledging. The shares were always ready for being used as Collateral. If I could see the shares in my account I knew that they are ready to be used as Collateral.

Well this is the gray area we were talking about. What if someone did not intend to use certain securities as a collateral but got the limit based on the stocks in the demat account. That person may suffer losses due to being unaware. This causes disputes and the regulator might also not view it positively.

Some brokers were not even transferring the shares to the Demat account and they were keeping them in their own pool account. From there they could move it to a collateral account without much issue.

However as per the regulations the shares need to be transferred to the Demat account after the payment is received.

 

[RockyRobust]

Well this is the gray area we were talking about. What if someone did not intend to use certain securities as a collateral but got the limit based on the stocks in the demat account. That person may suffer losses due to being unaware. This causes disputes and the regulator might also not view it positively.

Some brokers were not even transferring the shares to the Demat account and they were keeping them in their own pool account. From there they could move it to a collateral account without much issue.

However as per the regulations the shares need to be transferred to the Demat account after the payment is received.

Really there is lot of scope of manipulations then.

Thanks for to the point explanation.

 

[timepass]

Upgraded to the new version of NOW (1.13.3.5) as per your mail.

 

[lvgandhi]

I did not get any info regrading any upgrade of nest trader. Is it necessary to upgrade?

 

[timepass]

I did not get any info regrading any upgrade of nest trader. Is it necessary to upgrade?

This is an upgrade to NOW, not Nest trader.

 

[TradeSmartOnline]

Hello all,
We mentioned earlier that we were working on a few things other than EquiMax and Margin against shares.

We'd be happy to share a glimpse of another of our works. Please visit our youtube video on Trading from charts.

Hope you all will like it.