Live: Now you can Pledge Government Securities on Dhan

Hi Everyone,

For Super Traders on Dhan - Margin Benefit that they get is an incredible experience - possibly the best in the industry. We have write about this at length over here - Full post: Margin Benefits & Pledge Shares Experience for Trading on Dhan

As we enabled Pledging of Shares on Dhan, we have kept on adding more and more securities that we can accept as collateral and cash equivalent for traders to get the max benefit for their trading.

From today, we are expanding this list of acceptable securities for pledging even further. On Dhan, we will be accepting Government Securities as pledge and yes - this will be considered as a Cash Equivalent.

Dhan users will be able to get 90% of collateral value as margin which can be used as Cash Equivalent.

Scrip Name ISIN Collateral Var % Collateral Benefit % Component consider as a Margin
610GS2031 IN0020210095 10.00 90.00 CASH COMPONENT
618GS2024 IN0020190396 10.00 90.00 CASH COMPONENT
667GS2050 IN0020200252 10.00 90.00 CASH COMPONENT
676GS2061 IN0020200401 10.00 90.00 CASH COMPONENT
68GS2060 IN0020200187 10.00 90.00 CASH COMPONENT

You can access the complete list of accepted securities as Collateral Cash Equivalents - here

Please Note: We will only be accepting Government Securities which is traded in the Secondary Market for pledging.

Kuldeep Mathur
Risk Management

4 Likes

Hey @kuldeep ,

These long dated GS should have been bought through Dhan in order to be pledged, is that correct?

3 Likes

Hi @amit ,

yes you can bought at Dhan and also transfer from other Dmat.

2 Likes

Can we bought g security on dhan ? When i cheked On Go bid that time i think dhan is not available as i cheked and go bid g security reflect on dhan web or it’s available only on cdsl
? How we can plage on dhan please explain in detail

hi @gabarsing662 ,

yes you can bought at Dhan , G-sec pledging is similar normal stock pledge.

How to buy gsec. On dhan

Hi,
you can search it in window with Name of GOI .

What about fresh issue

1 Like

@kuldeep can you please add 824GS2027 securities , because i pledge these securites in zrodha , i need to transfer to dhan , its already approved by clearing corporation

Hi @riyas2831 ,

824GS2027 is not actively traded in secondary market, pledge allow for liquid and traded Gsec.

Hi @kuldeep ,
I am wondering when mutual funds and other bonds will be available for pledges in Dhan. Is there any possibility before launching a mutual fund platform in Dhan if we transfer from other platforms?

Hi @imsahadeb,

You can transfer Mutual Funds in Dhan via easiest but the same will not reflect in your portfolio. However, you can check the same on CDSL portal.

Hence, we suggest you to transfer the same once we are live.

Hi @Beena addressing your query here:

  1. We take market depth of both NSE and BSE for liquidity. However, due to a larger volume happening at NSE, that becomes our default exchange.

  2. When we say liquidity, it intuitively means almost nil slippage. For example, consider this scrip. It has no sellers but only buyers. Now if you (or we) had to sell, the slippage will be very high. (In bond market terms it would give an effective yield of 7.18% to the buyer for a tenure of 38 years. In layman’s terms, fixing your return at 7.18% for 38 years which is at par with 10Y yield. Eventually the client (or we) would suffer the loss.)

  3. Haircut of 10% on G-Sec is applied by the NCL (Clearing Corporation). We add no ad-hoc haircut on this.

@Beena NSE / BSE is the market place for retail investors. NDS-OM operated by RBI has a minimum ticket size of Rs. 5 cr.

As I mentioned, Risk is not just of the broker but also of the client. If the liquidity is low, the paper would be sold at far below price, which will create un-necessary loss to the client.

We allow Options Buying also over the pledged margin which makes us more prone to risk as compared to others.

However, having said this, we review the list of securities that could be accepted as pledge on periodic basis, please allow us some time to review the G-Secs and update the list. Will inform you over this portal / post once done.

From liquidity (and also 10Y ROI HTM) perspective, I think LTGILTBEES could be a better instrument for pledging, however it can also go down in short term like G-Sec.

@iamshrimohan,

What’s your opinion?

1 Like

@amit yes the LTGILTBEES are good alternative for G-Sec. If the motive is investing in fixed income securities and using the pledge proceeds as margin for F&O trading, I think LTGILTBEES are great. They come with a haircut of 8% as compared to 10% in the G-Secs

1 Like

@Beena Hi, we have updated the list of G-Secs for pledging. Please find the list here.

Can I use pledged margin to trade in both F&O and Commodity Futures and options?
And what is secondary market and how to trade over there?

@iamslk94 yes, you can use it to trade in all segments. Read more on this here - Full post: Margin Benefits & Pledge Shares Experience for Trading on Dhan

Thanks for the reply