{"id":4149,"date":"2023-04-25T11:12:04","date_gmt":"2023-04-25T11:12:04","guid":{"rendered":"https:\/\/www.paytmmoney.com\/blog\/?p=4149"},"modified":"2023-11-15T05:32:40","modified_gmt":"2023-11-15T05:32:40","slug":"margin-pledge-your-roi-booster","status":"publish","type":"post","link":"https:\/\/www.paytmmoney.com\/blog\/margin-pledge-your-roi-booster\/","title":{"rendered":"Margin Pledge: Your ROI Booster!"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Have you ever found yourself in a situation where you have an attractive trading opportunity but a limited cash balance in your trading account? Well, there is a solution \u2013 pledge your securities lying in your portfolio to the broker in return for collateral margin, similar to how we take loans against gold from banks to meet our short-term needs.<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When you pledge your gold jewelry worth Rs. 2 lakhs with the bank, you get a loan amount that is less than your gold amount, say 80% (Rs. 1,60,000). The margin pledge also works similarly. Stocks that are in your demat account can be pledged with the broker and take up to 90% of the collateral loan. The best part is that, as the owner of the stocks, you will get all the benefits of corporate actions, even those stocks pledged to the broker.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">At Paytm Money, we make the margin pledge easy for you. All you have to do is go to the portfolio section on the app and click on the Margin Pledge icon. You can pledge stocks that are allowed under Margin Pledge, and the received margin can be used for intraday trading, Futures &amp; Options trading and generating rental income against the portfolio.<\/span><\/p>\n<h2><b>How can I pledge my stocks?<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Go to the Portfolio section of the Paytm Money App and tap the Margin Pledge icon, as shown in the image.\u00a0<\/span><\/li>\n<\/ul>\n<p><img decoding=\"async\" class=\"aligncenter size-large wp-image-4150\" src=\"https:\/\/paytmmoney.wpengine.com\/wp-content\/uploads\/2023\/04\/Blog-screenshot_-1-777x1024.png\" alt=\"margin 1\" width=\"777\" height=\"1024\" srcset=\"https:\/\/www.paytmmoney.com\/blog\/wp-content\/uploads\/2023\/04\/Blog-screenshot_-1-777x1024.png 777w, https:\/\/www.paytmmoney.com\/blog\/wp-content\/uploads\/2023\/04\/Blog-screenshot_-1-228x300.png 228w, https:\/\/www.paytmmoney.com\/blog\/wp-content\/uploads\/2023\/04\/Blog-screenshot_-1-768x1012.png 768w, https:\/\/www.paytmmoney.com\/blog\/wp-content\/uploads\/2023\/04\/Blog-screenshot_-1.png 800w\" sizes=\"(max-width: 777px) 100vw, 777px\" \/><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Learn about the Paytm Money Margin Pledge process and features.<\/span><\/li>\n<\/ul>\n<p><img decoding=\"async\" class=\"aligncenter size-large wp-image-4151\" src=\"https:\/\/paytmmoney.wpengine.com\/wp-content\/uploads\/2023\/04\/Blog-screenshot_-2-1024x899.png\" alt=\"margin 2\" width=\"1024\" height=\"899\" srcset=\"https:\/\/www.paytmmoney.com\/blog\/wp-content\/uploads\/2023\/04\/Blog-screenshot_-2-1024x899.png 1024w, https:\/\/www.paytmmoney.com\/blog\/wp-content\/uploads\/2023\/04\/Blog-screenshot_-2-300x263.png 300w, https:\/\/www.paytmmoney.com\/blog\/wp-content\/uploads\/2023\/04\/Blog-screenshot_-2-768x674.png 768w, https:\/\/www.paytmmoney.com\/blog\/wp-content\/uploads\/2023\/04\/Blog-screenshot_-2.png 1201w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Pledge stocks which are allowed under Margin Pledge. Some stocks may not be accepted as per exchange guidelines. Here is the <\/span><a href=\"https:\/\/www.paytmmoney.com\/stocks\/margin-pledge-stocks-and-haircuts\"><span style=\"font-weight: 400;\">List of stocks allowed for Margin pledge.<\/span><\/a><\/li>\n<\/ul>\n<p><img decoding=\"async\" class=\"aligncenter size-large wp-image-4152\" src=\"https:\/\/paytmmoney.wpengine.com\/wp-content\/uploads\/2023\/04\/Blog-screenshot_-3-777x1024.png\" alt=\"margin 3\" width=\"777\" height=\"1024\" srcset=\"https:\/\/www.paytmmoney.com\/blog\/wp-content\/uploads\/2023\/04\/Blog-screenshot_-3-777x1024.png 777w, https:\/\/www.paytmmoney.com\/blog\/wp-content\/uploads\/2023\/04\/Blog-screenshot_-3-228x300.png 228w, https:\/\/www.paytmmoney.com\/blog\/wp-content\/uploads\/2023\/04\/Blog-screenshot_-3-768x1012.png 768w, https:\/\/www.paytmmoney.com\/blog\/wp-content\/uploads\/2023\/04\/Blog-screenshot_-3.png 800w\" sizes=\"(max-width: 777px) 100vw, 777px\" \/><\/p>\n<h2><b>Benefits of the Margin Pledge!<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The margin received from pledging can be used for\u00a0<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Intraday Trading in Cash segment\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">Trading in Futures &amp; Options for Intraday and Carry Forward<\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">Paytm Money allows you to use 100% collateral for intraday and carryforward trades, eliminating the need to maintain a cash margin. However, as per the rule, 50% of the margin needs to be funded by cash for carryforward trades. If users consume more than 50% of collateral funds, then the outstanding balance will be charged 1.5% per month in interest.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This will help you use the funds for trading purposes, which will help you take advantage of attractive trading opportunities and generate additional returns.<\/span><\/p>\n<h2><b>Generate rental income through option selling!<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The collateral margin received from Paytm Money can be used to take advantage of attractive trading opportunities and generate additional returns. Covered call is the most popular strategy traded using collateral margin. This strategy involves OTM call option selling and generating rental income against the portfolio. <\/span><span style=\"font-weight: 400;\">Know more about covered call strategy <\/span><a href=\"https:\/\/www.paytmmoney.com\/blog\/covered-call-strategy-for-option-trading-beginners\/\"><span style=\"font-weight: 400;\">here<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><b>Plus,<\/b><\/p>\n<p><span style=\"font-weight: 400;\">As the owner of the stocks, you are entitled to receive all the benefits of corporate actions, including dividends, bonuses, and other similar benefits, even if the stocks are pledged to the broker.<\/span><\/p>\n<h2><b>But what if you&#8217;re a trader who avoids risk?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">If someone expects a fixed return on their capital and also wants to trade, they can use the <\/span><b>Nippon LiquidBees ETF<\/b><span style=\"font-weight: 400;\">; <\/span><span style=\"font-weight: 400;\">provides higher returns than bank FDs and a 92% collateral margin through pledging. Typically used to supplement income from short-term trading such as option selling and swing trading,<\/span><\/p>\n<h2><b>Is there a cost to the margin pledge?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Indeed, all desirable things often come with a cost. <\/span><span style=\"font-weight: 400;\">Your broker wants to cover the cost. Paytm Money charges Rs. 15+GST for pledge and same for un-pledge request.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There is a cost involved in Margin Pledge. Paytm Money charges Rs. 15+GST for pledge and un-pledge requests.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In conclusion, while margin pledge can be a useful tool for traders looking to increase their trading volume and potentially earn extra income, traders should be aware of the risks involved in trading equity &amp; derivatives, including the possibility of significant losses. They should also be mindful of the interest rates and fees associated with the margin pledge, as these can impact their overall returns.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Despite these risks, margin pledge can be a useful tool for traders looking to increase their trading volume and potentially earn extra income. By pledging their existing securities as collateral, traders can access additional funds to trade in the derivatives segment, potentially increasing their returns on investment.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Click <\/span><a href=\"https:\/\/www.paytmmoney.com\/stocks\/profile\/margin-pledge\/holdings\"><span style=\"font-weight: 400;\">here<\/span><\/a><span style=\"font-weight: 400;\"> to access the margin pledge feature!<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>Disclaimer:<\/strong> Investments in the securities market are subject to market risks, read all the related documents carefully before investing. The securities are quoted as an example and not as a recommendation. This content is purely for information purpose only and in no way to be considered as an advice or recommendation. Paytm Money Ltd SEBI Reg No. Broking \u2013 INZ000240532. NSE (90165), BSE(6707) Regd Office: 136, 1st Floor, Devika Tower, Nehru Place, Delhi \u2013 110019. For complete Terms &amp; Conditions and Disclaimers visit: <\/span><a href=\"https:\/\/www.paytmmoney.com\/stocks\/policies\/terms\"><span style=\"font-weight: 400;\">https:\/\/www.paytmmoney.com\/stocks\/policies\/terms<\/span><\/a><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Author: Peter Cutinho<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Twitter: <a href=\"https:\/\/twitter.com\/petercutinho\">@petercutinho<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Have you ever found yourself in a situation where you have an attractive trading opportunity but a limited cash balance in your trading account? Well, there is a solution \u2013 pledge your securities lying in your portfolio to the broker in return for collateral margin, similar to how we take loans against gold from banks<a href=\"https:\/\/www.paytmmoney.com\/blog\/margin-pledge-your-roi-booster\/\">Continue reading <span class=\"sr-only\">&#8220;Margin Pledge: Your ROI Booster!&#8221;<\/span><\/a><\/p>\n","protected":false},"author":24,"featured_media":4153,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"single-classic-ns.php","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[],"class_list":["post-4149","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-product-updates"],"_links":{"self":[{"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/posts\/4149","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/comments?post=4149"}],"version-history":[{"count":0,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/posts\/4149\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/media\/4153"}],"wp:attachment":[{"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/media?parent=4149"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/categories?post=4149"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/tags?post=4149"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}