What is Collateral Margin?

Collateral margin is the margin you receive for trading/investing by pledging holdings (held in your demat account). 

Margins are extended against exchange-approved securities and the margin available for each type of collateral (security) varies based on the applicable haircut percentage. For example, you generally receive higher margins against large-cap stocks as opposed to small-cap stocks due to their lower volatility.

Collateral margins can be used to trade futures, sell options and to trade intraday in equity.

The Margin Value column under the Pledge window on MyGeojit shows the margin available if the concerned security is pledged, after accounting for the applicable haircut.

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