ProStocks Collateral Pro

PROSTOCKS COLLATERAL PRO

Collateral margin, also known as margin against shares, refers to the practice of using your securities or financial assets as collateral to secure margin limits for taking Equity Intra-day position, Positional as well as intraday trades in futures and Options Segment.

ProStocks' Collateral Pro enables leveraged trading, where investors can increase the potential returns on their investments. By taking margin limits against their securities, they can amplify their trading positions, potentially magnifying gains (and losses) during market fluctuations.

Collateral Pro gives you the freedom to trade against your long-term investments holdings - Stocks, ETFs and Government Bonds as trading balance without selling them.

You need not have 100% cash in your Trading Account to meet the Exchange SPAN & Exposure Margins. Stocks pledged under the Collateral Pro facility can be used for Margins.

Illustration: Say you wish to go long 1 Lot of NIFTY, & the margin required to initiate the position with any Product type is Rs.60000. Currently you would need to have the entire Rs.60,000 in your ProStocks Trading Account as a cash balance.

With Collateral Pro, even if your ProStocks Trading Account balance is 30,000, you can initiate this position if the value of your pledged shares exceeds Rs.30,000.

FAQs

In which segment can I trade against collateral?

Collateral PRO allows traders to use these shares as margins after pledging for carry forward and Intraday trades in the NSE F&O & NSE CDS Segments and Intraday trade in CM segment.

What is a Haircut and how does it impact the pledge margin?

A 'haircut' is essentially a risk-management measure. This is difference between the market value of your securities and the value that is considered for the pledged securities.

For Example, if you pledge securities valued at ₹1,00,000 and the applicable haircut is 20%, the collateral value you will get will be Rs 80,000.

Please refer this link for list of approved securities

What is the HAIRCUT for Collateral PRO?

All listed and approved equity holding are subject to minimum haircut of 20% or haircut applied by NSE Clearing Limited (Clearing Corporation), whichever is higher. Central Government Securities( G Sec and T Bills) , Sovereign Gold Bond and MF units are subject to same haircut as applied by Clearing Corporation.

Why can I not pledge my holdings?

You can’t use all your Demat holdings for Pledge as only specific Stocks, ETF and MF Units. All SGBs and all Central Government Bonds are allowed to Pledge for margin benefits.

List of Approved securities available to Pledge click here.

Why margin against my Pledge holdings in not provided despite in the Approved list.

Besides list of approved securities, Clearing corporation accept up to certain number of shares/ securities per Broker Member and all the Broker Member put together for certain stocks/ securities and in case this limit has been reached at clearing corporation , you will not get margin benefit. List of approved securities also mention quantity to be accepted per broker member and all broker member together.

When can I get the margin benefit after pledging of my holdings immediately?

Once you sent request for pledge of securities before 4 pm on any working day, ProStocks will upload the same in Depository system and you will receive email as well as SMS (NRI client will received email only) for link to approve the pledge on CDSL website. Once you approve the pledge, we need to re-pledge in favour of Clearing Corporation (CC) on or before 6 pm for you to get margin benefit on next trading date.

Do I need to maintain 50 Cash and 50 Collateral, What happen if I miss to maintain the same?

There are securities like G Sec, T Bills, Certain MF units including your ledger balance with ProStocks, which forms part of cash component of collaterals and there are securities which are not part of cash component of collaterals called non cash component. You need to maintain minimum of 50% of cash component for your non cash collaterals to give you margin benefit. You may give 100% collaterals as cash component. Your non cash collaterals in excess of cash component of collaterals will be ignored for the purpose of margin benefit.

You need to pay 18 % p.a interest ( payable monthly or before release of collaterals, whichever is earlier ) for shortfall of cash component on overnight basis and you need to bring additional cash within 15 min of market opens for next working day to avoid sq off of your position.

Where can I see my margins available after successful pledge?

You will see value of collaterals under collateral column in margin break up window. You will also see pledged quantity in your holding window.

Can I sell my pledged holdings?

You will not be able to sell your holding while they are pledged. You need to request for un-pledge of securities before you can sell. You need to send email to [email protected] or call Risk team for un-pledge of securities.

Soon, we will provide the option to request for un-pledge, inside trading application, so you can unpledge online real-time basis.

What are the charges for pledging and Un-pledging?

We charge Rs 50 plus GST for each request per ISIN for pledge as well as un-pledge inclusive of depository charges.