Option selling and Option buying using pledging

Hi,
I have stocks worth 6 Lakh in 3 blue chip stocks in my zerodha account. Now I want to pledge this stocks by transferring it to my Dhan account. However I have never done trading using margin.

I have following queries

If I pledge all my 3 stocks worth 6 Lakh and if I have to do 3 lots of Bank Nofty Option Selling than how much cash I should have apart from the pledge amount can someone please quantify. If any amount balance I want to do option buying

My stocks are Bajaj Finance, HDFC Bank and Titan and all are worth approx 2 lakh each

Request to pls guide me step by step With an example

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Hi @lucky10101 you can transfer your Shares from Zerodha to Dhan. We have written a detailed not on how to do that here.

Now for margin requirement, there is a rule that a client must give atleast 50% of Cash or Cash Equivalents (G-Secs, SGBs, and Liquid ETFs). So if your margin requirement for a trade is Rs. 5,00,000, then you can give upto 50% i.e Rs. 2,50,000 as Non-Cash (which includes your stocks) and remaining Rs. 2,50,000 needs to be funded by Cash or Cash Equivalents.

Note that All stocks have a haircut deduction and after that they are valued for pledge purpose. For example, if your Titan shares are worth Rs. 2,00,000 and the haircut on the same is 12.84%. So you will be able to only get Rs. 1,74,320 of the value. The details of haircut can be found here.

The 50% rule is only for CNC/Normal position in options though, right?
For intraday, no cash/equivalent is needed in margin if I am correct.

Hey @swatijain ,

For intraday equity or option buying, there is no requirement of 50-50 margins. However in case of intraday futures or option selling, 50-50 margins will be required.

Thanks,
Pranita
Product @ Dhan

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Are you sure about intraday futures and option selling needing 50-50?
I have been selling options and trading in futures intraday on Zerodha with 75-80% margin. May be I am missing something here?
Tried option selling on Dhan too with less than 50% cash. Will take up option selling more regularly here after API is properly integrated with my own ordering system.

Yes, @swatijain . You must maintain 50:50 margin on intraday option sell span and exposure both. You will be able to do it but will get charged interest incase you are not maintaining the required margins.

But interest will be charged only if I carry the position overnight right? If I’m closing positions in intraday then no interest is charged and essentially I’m able to trade with less than 50% cash?

Hey @swatijain ,

No, on option selling, interest will be charged on intraday as well if not maintaining 50% margins.

Thanks,
Pranita
Product @ Dhan