Clarification regarding Cash required for option selling with Collateral margin

Can Free Cash available margin may be displayed in Margin Tab.

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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.

Pls clarify.

If yes it will be awesome :sunglasses:

BTW new App looks awesome and fast also.

Nice work…

Waiting eagerly for Custom Strategy builder

Hi @bsjhala

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??

Hi @Akhil153045

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??

Hi @Akhil153045

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

Full post on Margins: Important Update: On Margins, Usage of Broker Funds, and Interest Charges

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?

@Akhil153045,

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!

My funds are collateral(1L) and cash around 1.3L currently. But I got the collateral margin by pledging the shares today. So till yesterday my total margin consisted of only only cash (1.3L). I made position out of that 1.3L and now today I pledged shares and got collateral margin of 1L and then made another position out of that collateral margin of 1L which was purely collateral as I did not have any cash at that time. So how will the funds be utilised for new order?
Will there be penalty or interest levied on second order?

Hi @Atharva Welcome to Dhan community!

As per the telephonic conversation with our executive we understand that your margin concern has been addressed.

Further, you need to maintain the 50:50 margin and if it is not maintained then 0.0438% interest per day is applicable.

But still can you clarify whether in this particular case there will be any interest or no?

Hi @Atharva

Request you to get in touch with our help support at help@dhan.co or call us on Phone Support 022 - 4890 6273