Can anyone clarify me Cash required for option selling with Collateral margin.
Suppose i am having 6 lakhs of liquid bees pledged for collateral margin of 5.55 lacs.
How much free cash i require for option selling worth 5 lacs.
Is niftybees considered as cash component.
Pls clarify so that i can plan accordingly.
From where can i know whether i have crossed, free cash limit to avoid penalties
nifty bees is non- cash component
cash component is liquidbees , money market and liquid fund and gsec goverment bond
but in dhan currently gsec and mutualfund is not available
Please find the below answer for your queries.
The Clearing Corporation (CC) has required brokers to maintain a 50:50 ratio for margins, which is split as:
50% cash and cash equivalents
50% non-cash (approved securities)
If the collateral is cash component then no extra cash required unless there is a MTM loss.
Nifty Bees is a non-cash component. You may refer our collateral list here.
Since the limits change real time based on your positions, the changes in collateral margin required cannot be shown. At the time of placing an order/basket order, we show the overall margin required. We recommend You may compare this with the cash & collateral available in Money tab to know if the 50:50 margin is being met, and keep a buffer for possible MTM loss in the cash component.
Also, note that in case of overnight F&O positions, the margin funded via collateral will attract interest @0.0438% per day. For your reference, please refer Collateral in detail here and Interest scenarios here.
If i have 6 lacs of liquid bees collateral margin, than i can sell option worth 6 lakh without having any cash.
Is it …
Can Free Cash available margin may be displayed in Margin Tab.
Is the collateral margin can be used to buy Option also.
Other broker doesnot allow buy on margin.
Does Dhan allow Option on collateral margin.
If yes it will be awesome
BTW new App looks awesome and fast also.
Waiting eagerly for Custom Strategy builder
Thanks for your kind words. We really appreciate it.
Below are the answers for your queries.
Yes, you can sell options by having only liquid bees collateral amount and can buy options as well with collateral amount. The free margin will be displayed under the Money tab > Margin Summary > Available for Investing section.
Our latest announcement for Strategy Builder here.
For quicker responses, feel free to call us at 022 48906273 or Chat directly from the CS section of App / Website.
buy options as in for hedging and not naked options buying…right??
The collateral amount can be used for naked option buying as well.
What?? No way!! How is this possible?? @Sameet
What if I buy a naked option and that option contract expires worthless then what?? How will you guys recover the money from me??
@admins anyone reply how is this possible??
In such a case, as the client has pledged their securities to get margin, the same can be used to cover any shortfall.
@Sameet I don’t understand this… can you please elaborate with example?
Someone from @Dhan_Help @admins please explain this
No @PravinJ sir, I am asking lets say I brought an naked option contract at 100rs with the collateral amount that I received from pledging securities and no funds in account. Now this open position is in loss and I book the loss at say 50rs. I am asking how will you guys recover the loss from me?
If there is a ledger debit, RMS will liquidate pledged securities to the extent of debit.
Thanks for replying @JayK
Ohh okay… that means the 50rs x 25 = 1,250rs worth of shares will be sold by the broker?
@Akhil153045 It will to the extent of debit in ledger. We have mentioned this in detail under our Risk Policy. Here is an extract:
If there is a failure on part of the customer to clear the ledger debit then Dhan reserves the right to liquidate the stock upon ageing of the ledger debit beyond T+5 days The stock will be sold from customers’ accounts on T+6 days after the ledger debit.
Okay @JayK sir, got it thanks for clarifying. Have a great day!