Stock Pledging: How to Borrow Money from Your Broker

[00:00] If you see on the screen, I have almost 2,70,000 I pledge the stocks from my holdings and I can grow that 2,70,000 to 48 lakhs

[00:14] Not just Zerodhana, but also Upstoke and other Broking platforms In the stock market, we can take a loan or money from the broker

[00:28] Usually, whether we have gold, land or house We collect some starting charges But if you borrow all the stocks, mutual funds, sovereign gold bonds, liquid funds, liquid Bs

[00:46] from the broker, starting 30 rupees plus GST But later, no one charges us a single rupee for the money they give

[01:00] We use it personally or even in the previous times, whenever we showed you the profit you can see something in the holdings

[01:13] In fact, you can see sovereign gold bonds, nifty ETFs, blue chip stocks Why do we invest so much money in investments? Not only us, whoever you see

[01:28] Why do they invest in such a way? Friends, there is a video in our channel about this pledging topic I explained each and everything to you in a beginner level

[01:45] I will talk about what you should know How to earn extra income because of pledging If you don't know those, you will lose your investment

[02:01] So, I will cover these points and end today's video If you think this content that we are sharing is valuable Like the video and try to encourage the efforts we are making

[02:19] Pledging is keeping the money You hold the money in your D-mat account Or other than D-mat account, if you hold bonds

[02:31] Or liquid funds or active mutual funds So, if you hold any of these stocks for a long time You hold those bonds and take money from the broker

[02:45] Not all brokers do this for free 30 rupees plus GST If you pledge and keep the money and separate the stocks

[02:59] It's only for pledging Provide this without any charges There are some elements

[03:11] You will pay 20% more to the broker Now, let's talk about the important things Let's say, in a particular company

[03:25] If you take those 1000 rupees and pledge it to the broker If you have good stocks If you have bad stocks

[03:41] They will give you the remaining money They will give you 900 rupees If it falls to 10%

[03:54] If you have very old style stocks They will release 50% or 60% How much haircut is there in which stocks?

[04:07] If you want to see it before pledging How much haircut is there in which stocks? They will keep it safely with the broker

[04:22] You will see it here If you pledge a stock of 100 rupees If it is a simple stock

[04:34] And give you 87.5 rupees It will be in the excel sheet We don't get the entire money

[04:48] For example, I have put a target They gave me 86 rupees for 100 With the money that comes, can I buy another stock?

[05:01] I can't buy stocks that are in the delivery I can sell options in intraday And I can buy and sell stocks

[05:17] But, in positional, I can sell options This is another important element that you should remember You can't carry more than one day

[05:29] And another important element You can't buy futures or sell options If you want to carry more than one day in a strategy

[05:44] Then you should pledge 50% of your stocks or mutual funds Another 50% should be used for the money you have You want to sell options for 50% of the money

[06:01] And you want to carry it in positional In that case, in the money that you are asking for 100,000 rupees Even if you have 10 lakhs in your account

[06:17] You can use only 50,000 rupees from the money you have Another 50,000 or 50,000 should be used for the money you have Cash components are elements that are very low risk

[06:33] I have given you the details of the cash components Like liquid Bs, liquid ETFs, government securities and debt

[06:47] Most of the ETFs and mutual funds are in the cash component category 50% of the stocks or mutual funds or whatever the risk is

[06:59] Another 50% should be used for the money you have Or for the liquid funds or debt mutual funds And the broker will not charge any kind of interest on this

[07:13] I have just pledged the stocks I have No, mostly if you pledge today I will explain it to you at the end of the video

[07:27] Now let's talk about the positives Let's say I am holding Nifty ETF When will that Nifty ETF give me a profit?

[07:42] If the market falls, I will not get any profit from that ETF In such a situation, if I keep this ETF as a token

[07:54] Let's say 10 or 15% away Let's talk about each case If the Nifty keeps growing, my ETF will grow and so will the call

[08:10] Let's assume it is possible My ETF will give me that 15% profit Till that time, I will get all the profit

[08:23] The more I go far and sell the call I cannot take that profit I will not get any profit

[08:35] If I am holding a big quantity of stock or index With the money that comes, with half the profit By selling the call to that particular stock or index

[08:49] Till the time I sell it, I will get the profit Second, if the market or stock is there With that, I will buy the ETF that I sold to that particular stock or index

[09:05] Then the loss that comes in that index It will manage it till some extent With that profit, I can buy the stock or index that I sold

[09:18] So, this is the least risk case Let's talk about the negatives Or even liquid funds or debt-related securities

[09:32] By selling calls that are far away This is called a covered call I will tell you simply

[09:46] If you watch this once, you will understand the entire strategy Corporate actions like dividend, stock split, buyback, bonus, etc. Whatever corporate actions are worth to the stocks in your D-MAT account

[10:01] They are all worth We are not taking a bribe Even if we have a very small return by looking at the safe options

[10:14] Particularly, they will be doing covered calls strategy One thing to keep in mind is If you lose their value

[10:29] When it was at 19,500 If 10% is lost, they kept 1 lakh aside and gave you 9 lakhs to trade

[10:41] Or doing covered calls If the value of the pledged is increasing The broker gave you 9 lakhs

[10:55] When it was at 19,500 The money that the broker gave you is a risk for the broker So, the value, the stocks or indexes that you pledged

[11:08] The broker will tell you to pledge it additionally And the percentage that we gave you They will ask you to maintain the margin of safety of 90% to 10%

[11:23] You are not able to pledge it additionally And balance the loss that is coming

[11:35] They will sell it in the market So, whoever enters without any logic They are going to risk

[11:50] If they are impacting Market will be falling If the market falls, the call in the covered call will be zero

[12:05] They are doing neutral option strategy Because they have not only the money they have Market gap is down opening

[12:19] Broker will ask for more You have to balance it Broker will sell the money that you have in the market

[12:36] Means, if you invest and put it in the index or stock If you trade more options than you do with that money So, only those who are hedging with a risk reward

[12:51] And trading with clarity will get the benefit of pledging I will get extra income by pledging and putting the money Definitely, it is a double edged sword

[13:04] So, traders should understand the risk in this pledging Before thinking that I can pledge and earn money by just leaving the stocks Another important element

[13:19] If you are not able to transfer the money to the account when you have to pay And you have to maintain the cash component 50% And 50% of the pledged money

[13:33] Or if you are not able to add the money to the account Overall, if you are using the broker's money in the entire process How much will it go?

[13:48] 0.035% per day They say they will blame you The broker will intimidate us

[14:03] They are adding funds and reducing positions This pledging will work better Now, let's know how to do the pledging

[14:17] But I will explain the process clearly First, Zerodha It is near to 2.7 lakhs

[14:30] Regarding this, we should keep the stocks, ETFs, mutual funds, etc. as a target Here, you will see two stocks for 25-25 lakhs

[14:44] Nifty 50 Index The one on top is also ETF So, why 25 lakhs in this and 25 lakhs in that?

[15:02] As I told you in the beginning A strategy is to buy 50% non-cash components Or active mutual funds

[15:15] Government securities, liquid funds, liquid bees, sovereign gold bonds And the one below this should be half 25 lakhs in ICICI liquid fund ETF

[15:30] Half of this and half of that If you feel comfortable in this I am not saying that you should invest in Nifty bees or ICICI liquid funds

[15:44] Cash component and non-cash component We will not have any issue when we trade with the money that comes from pledging But if we buy all the Nifty bees and put it in the cash account

[15:58] You should be able to manage the calculations time to time So, I will pledge both 25 lakhs and 25 lakhs in this So, you can see how the previous 2 lakhs and 70 thousand will grow

[16:12] Next, portfolio, holdings You will see which stocks are in your D-mat account Go to the console and click on it

[16:26] Look here And if you pledge, you will see a huge haircut You can also know how much haircut you will get when you pledge

[16:41] You will keep 8 rupees with you for safety For safety They change all the time

[16:54] If you do it a few times, the stock in your D-mat It may be a micro cap or penny stock Mostly micro caps, small caps, penny caps

[17:07] So, you may take our situation Even if they see a good opportunity in small caps or micro caps Capital will get blocked

[17:22] But that breakout should be there until the entire cycle play If we think the best strategy for us is this

[17:35] Will invest in ETFs, liquid funds, liquid bids How much haircut will you have?

[17:47] Click on the terms and conditions If there is 12,000, I have only 1200 quantity What will I get if I pledge 8% of that?

[18:02] So, how much money we need We can pledge that much money The total value I pledge is 24,35,000

[18:19] They are saying that they will release money to me at 8% or 22 lakhs Pledge request has successfully submitted Before knowing the next process

[18:32] I am pledging liquid ETF also So, if I put the total amount of 2500 If I take 10% haircut

[18:46] And they will release me at 22.5 lakhs So, once we have pledged Because it is not with us

[19:02] Once the process is completed, it will go to the broker side If we send it to the broker Next, there will be a link for your mobile and email

[19:15] I will give the link in the description and comment section It can be late sometimes If you go to this link and log in and check

[19:31] The broker will look at it and release the money Or if you have any doubts, I am giving this link Bookmark it

[19:45] And authenticate the pledged stocks If we placed a token But what did the Sevi's do?

[19:57] And place them in their D-mat So, even if we place a pledge request to the broker We have to enter OTP

[20:10] From the CDSL portal Or you can save this link and come to this page Or if you remember, your D-mat account number

[20:26] Once you log in, you will see which stocks you have pledged We put Nifty ETFs related to Nippon We will see these two

[20:42] You thought you don't need to do one more So if you are creating a pledge request by mistake If you want to pledge everything you did correctly

[20:58] Two of them were ticked Once you accept the OTP What happens next?

[21:10] If I want, I can withdraw it I can buy options Collateral equity is 23 lakhs

[21:26] Means, non-cash component is 23 lakhs 45.93 lakhs total collateral money

[21:38] How much cash is present for it? So if you see money on any account So next time if you see a profile like this

[21:51] If you look at the bottom So that through their investment There will be money from that

[22:03] Similarly, through the money they have What are they doing with the triangle strategy? Friends, after you open the Upstox app

[22:16] It will take you to a webpage You can create a pledge related to your favorite stock And how many stocks you have to pledge

[22:31] From that, how many stocks you want to pledge They are taking the pledge cost There will be all the details

[22:46] Again, I told you about a website URL After you save it, you can go directly To show you in that link

[22:59] That you want to pledge these stocks through OTP In Fires If you scroll down a little bit, it will say pledge

[23:13] In Angel Broking You will see stock pledging there Mutual funds, ETFs, bonds

[23:26] You can pledge all these I did a dedicated video on pledging I told you I will give you the excel sheet data

[23:42] All the important links will be in the description and comments I will come back with another interesting video Jai Hind