MStock charging interest on F&O – F&O – beragampengetahuan – Beragampengetahuan

This is the mstock page for F&O pledge
Margin Pledge: What is Margin Pledge & its Meaning | Mirae Asset .

They are saying that for pledging shares, they are going to charge interest ! Never heard any other broker charging interest for margin against collateral for F&O trading!!

Have anybody heard anything like that? Is it legal ?

They charge 0 Brokerage, they need to make money from somewhere i guess.
Otherwise, they don’t have to provide capital for pledging, so no reason for interest and brokerage will compensate for any additional risk.

This kind of think becomes a big issue with intraday trading, esp due to quarterly settlement. Getting all capital back every 3 months is just too much, and sending back will become impossible due to bank limits.

Your returns reduce too, intraday returns are anyway reducing these days. So more incentive to shift from trading to long term / positional / ASBA. For anyone with decent capital, best to change broker.

Broker’s main revenue source now a days in not brokerage, but float interest income. Just look at zerodha collateral to CC and you will find that they have given FDR instead of your cash. That is okay, someone will earn from cash and they should. MStock also earns the same.
Most brokers (unlike zerodha) don’t even tell people that 50% cash required can also be interest bearing security and ask for real cash. MStock didn’t even allow pledging till now for getting interest income even from margin money! MTF income is separate.

I am perfectly fine with brokers earning income as long as they are not cheating. They should call 9.99% fee for haircut, instead of interest. Interest charge is plain cheating.

for 50% non-cash portion, they are asking for interest on pledged shares. 50% cash they are asking separately. The balls they have got to be so brazen in illegality!!
If They asked for interest for 50% only for cash portion, it was understandable. However, I don’t think that is allowed by SEBI yet.