Say I bought some shares worth outside my overall capital using MTF, If I intentionally havenāt pledged the shares on the same day, It is obvious it donāt have enough balance for the shares to be converted into normal delivery. Under such scenario my holdings will be sold in T+5 days.
Based on above scenario answer
1.Would I be charged interest even after without pledging the shares.
2.Do I get benefit of any profit or loss made in those T+5 days
3. Do I have the authority to sell the shares before completion of T+5 days (Whenever I Want )
4. And finally are there any additional penalties or charges involved.
Letās say you bought a stock with 2,500/- (your funds) and 7,500/- (funded value). If you sold this stock with a profit of 1,000/- then your gross value will be 3,500/- before any charges deduction.
Yes, profit or loss will be credited & debited respectively in your account.
There are two settlements Pay-in and Pay-out, the firstly happen at 10:30 AM and Payout at 1:00 PM, this was the exchange standard timing across all brokers.
The intial margin in my account from the example you have shown Rs 2,500, can that be from pledging existing demat shares or by pledging liquid mutual funds as cash equivalent collateral margin?
The initial margin can be from your existing pledged demat shares. However, we currently do not have the option of pledging mutual funds so that may not work. Hope this helps!
Hello @Pranita . Why are we calling this 2500 as initial margin? It is actual funds that needs to be contributed by the client and not some margin ( be it cash component or non-cash component)
Can I do away with contributing the funds and just use my existing margin as a substitute for my contribution to MTF. It sounds weird
The term āinitial marginā was used for the simplicity of understanding for the user that asked the question on similar lines. However, you are right about it being the client contribution (cash or non cash) that is required to take any MTF position.