Can we use pledge margin for overnight options position? If yes then is it required 50% cash or cash equivalent margin for the same ? THANK YOU @Dhan
Hi @TradeWithAB,
Yes, you can use the pledge margin to trade in all segments, you need to maintain the negative ledger balance to avoid ageing based square-off.
Below are the scenarios for each segment when utilizing a 100% collateral amount without a cash balance.
Equity Delivery and Option Buying:
- The amount will be debited, resulting in a negative ledger, which triggers the T+5 ageing debit square-off policy.
- Margin interest will apply only for the day of the Equity Delivery purchase.
- DPC interest will be applicable on the negative ledger.
Option Selling:
- Span and exposure will be blocked, but not debited, so there won’t be a negative ledger.
- You can hold your position for the long term, as long as you maintain any additional margin requirements that may arise.
- Margin interest will apply since the 50:50 cash to collateral ratio hasn’t been maintained until the position is closed.
Future Buying or Selling:
- Similar to option selling, span and exposure will be blocked but not debited, avoiding a negative ledger.
- Since MTM (Intraday) profit or loss is settled on the same day, you need to cover any losses to avoid a negative ledger.
- You can hold your position for the long term, provided you maintain any additional margin requirements that may arise.
- Margin interest will apply as the 50:50 cash to collateral ratio hasn’t been maintained until the position is closed.
Please note that if the ledger goes negative due to margin requirements or MTM loss in futures position, it will trigger the ageing debit policy. You may read more about DPC in our Risk policy under “Delay Payment Charges” here.
Hope this clarifies your query.
How much is the DPC Charges on dhan?
Hi @TradeWithAB,
The DPC charges are 0.0438% per day on the negative ledger balance.