Question 1

What is Pledge Shares?

Accepted Answer

Pledge Shares is a facility where you can pledge your existing shares with the broker and in return,
the broker will give you capital to trade or invest in the stock market.

Question 2

How does Pledge Shares work?

Accepted Answer

Say you want to take an intraday position worth ₹1 lakh but you only have ₹50,000 in your trading
account. You need another ₹50,000 to place this order. Now assuming you have shares worth ₹70,000 in
your Demat account, you can pledge them and get additional margin for trading. In this case,
assuming a 20% haircut, you will get ₹56,000 as collateral margin helping you place your desired
intraday order.

Question 3

In which segments can I avail Pledge Shares?

Accepted Answer

Pledge Shares is available in Intraday, Futures & Options, across all segments – equity and
currency. You can even use margins received under Pledge Shares and take fresh positions under Pay
Later (MTF) and enjoy unlimited holding period. Know how you can trade with zero capital.

Question 4

What interest rate does m.Stock charge on Pledge Shares?

Accepted Answer

m.Stock does not charge any interest to avail margin with Pledge Shares for Intraday trades. For F&O
trades, the interest is ZERO unless there is a margin shortfall. In case of a margin shortfall, an
interest of just 0.0274% per day, is charged.

Question 5

How much interest is charged on Pledge Shares?

Accepted Answer

m.Stock charges 9.99% p.a. interest on Pledge Shares, which is one of the lowest in the market. So,
if you take funding worth ₹100, you will pay ₹9.99 interest in a year, which is ₹0.027 in a day. To
elaborate, here are 3 scenarios:

Value of existing stock portfolio   Haircut   Funding received after haircut   Interest payable (@ 9.99% p.a.)
₹10,000                             10%       ₹9,000                           ₹899
₹1,00,000                           15%       ₹85,000                          ₹8,492
₹10,00,000                          20%       ₹8,00,000                        ₹79,920

Question 6

Will my shares be transferred to the broker?

Accepted Answer

No, your shares will remain in your Demat account. You will simply have to mark a pledge in favour
of m.Stock. When you sell or close your position, the pledge will be removed and the stocks will
become free for your use.

Question 7

What is the difference between Margin Trading Facility and Pledge Shares?

Accepted Answer

In Pay Later (MTF), you get funding against cash available in your trading account. Whereas in
Pledge Shares, you pledge your existing stock portfolio with m.Stock and in exchange, you receive
funding. Did you know, you can use Margin Pledge and Pay Later (MTF) together?

Question 8

How much funding can I get?

Accepted Answer

With m.Stock, you can get up to 87.50% funding in 700+ Stocks. However, funding is providing after
accounting for ‘haircut’, which is decided by our Risk Management team. For example, if Infosys Ltd.
has a haircut of 15%, then you will receive ₹85,000 in funding against stocks worth ₹1 lakh.

Question 9

What is haircut? Why is it deducted?

Accepted Answer

Haircut is a SEBI mandated mechanism, which protects the broker from unexpected price movement.
Every stock has a pre-decided haircut, which is deducted from the overall funding amount. For
example, if the total value of stocks in your portfolio is ₹1 lakh and the stock haircut is 10%,
then the broker will give you funding of ₹90,000.

Question 10

When will I receive the margin?

Accepted Answer

Instant margin will be added to your ‘Available to trade’ balance.

Question 11

When will I start incurring interest charges?

Accepted Answer

Margins or limits will be credited to your m.Stock account on the next trading day (after Pledge
Shares request is raised). However, interest will be charged only from the day you actually start
using the margin.

Question 12

Can I sell pledged stocks?

Accepted Answer

Yes, you can sell pledged stocks, without any restrictions.

Question 13

What are the pledge charges?

Accepted Answer

Pledge creation charges is ₹0 & closure charges is ₹32 per PSN (Pledge Sequence Number) per day
(+GST) for Pledge Shares facility.

Question 14

What is a margin call?

Accepted Answer

Margin call is received from the broker when the margin available in your trading account is not
sufficient to cover your open positions. On receiving margin call, investor must either infuse fresh
capital or square-off their position.

Question 15

What if the margin call is not honored by the client?

Accepted Answer

In case the margin call is not honored, the RMS team will square-off the position on a best effort
basis.

Question 16

How can I access the Pledge Shares report?

Accepted Answer

To access Pledge Shares report: Login >> Menu >> Reports >> Pledge/Unpledge

Question 17

How can I avail the Pledge Shares facility?

Accepted Answer

In the menu section, under ‘Products’ choose ‘Pledge Shares’
 Choose stocks to be pledged from list of approved stocks in your Demat holdings
 Enter quantity and click on ‘Pledge’
 On the CDSL page, validate pledge using OTP
 Margins will be added to your ‘Available to trade’ balance on the next trading day
 You can use this margin to take positions in Intraday, Futures, Options (selling/writing only) and
 Pay Later (MTF).

Question 18

How can I pledge my shares on m.Stock?

Accepted Answer

To pledge shares on m.Stock, log in to your account and go to the 'Margin Pledge' section. Select
the stocks you want to pledge from your demat holdings, confirm the request, and approve it through
an OTP-based e-sign on CDSL’s portal. Once approved, the margin is added to your trading account,
usually within a few hours.

Question 19

How much margin will I receive from pledging shares?

Accepted Answer

The margin you get depends on the type of shares you pledge and their haircut value. Haircut is a
percentage reduction to cover price fluctuations. For example, if you pledge stocks worth ₹ 1,00,000
and the haircut is 20%, you'll receive ₹ 80,000 as usable margin. Different stocks have different
haircut rates, based on their risk and liquidity.

Question 20

Will I be charged interest for the margin I get from pledging shares?

Accepted Answer

No, interest is charged only from the day you start utilising the received margins and not from the
day it is credited in your m.Stock account. Additionally, interest is levied only when there is a
margin shortfall against your position. In case you utilise margin availed by pledging shares and
there's no shortfall against your position, then no interest will be levied. You can access
margin-related details from Reports section on m.Stock App and web.

Question 21

What are the charges for pledging shares on m.Stock?

Accepted Answer

m.Stock charges a small fee for pledging and unpledging shares, as per the depository and clearing
partner guidelines. These charges are usually nominal and are displayed transparently at the time of
the pledge request. There are no hidden costs or commission-based charges for using the pledge
facility. You can check our detailed pricing here: https://www.mstock.com/pricing

Question 22

How can I unpledge my shares?

Accepted Answer

You can unpledge your shares anytime through the m.Stock platform. Go to the 'Pledged Holdings'
section, select the stocks to unpledge, and submit the request. The shares will be unpledged once
the margin tied to them is cleared. This process is usually completed within one working day.

Question 23

Will the margin I receive change if the price of my pledged shares changes?

Accepted Answer

Yes, margin value changes with share price movement. If the price of your pledged shares rises, your
available margin may increase. If prices fall sharply, the margin may reduce. In some cases, you may
need to add more margin or reduce your position to avoid penalties or auto square-offs.

Question 24

Are there any cases where I won’t be able to pledge my shares for margin?

Accepted Answer

Yes, not all shares are eligible for pledging. Illiquid stocks, T2T (trade-to-trade) category
shares, and penny stocks are usually excluded. Also, only shares held in your demat account with
m.Stock can be pledged. Always check the list of approved securities before placing a pledge
request.

Question 25

Are there situations where I won’t be allowed to unpledge my shares?

Accepted Answer

You can’t unpledge your shares if the margin from those shares is actively being used in your open
trades. To unpledge, you’ll first need to free up the margin either by closing trades or adding
extra funds or margin. Once done, you can submit an unpledge request through the platform.

Differences	Pledge Shares	Pay Later (MTF)
Purpose	Allows using existing holdings as collateral	Allows leveraging on available fund
Collateral required	Existing shares in the Demat account	None
Interest charges	Charged on the margin utilised	Charged on the overall funding
Risk of charges	Higher in volatile market conditions	Based on purchased stock performance

Pledge Shares.

What is Pledge Shares facility?

The Pledge Shares advantage with m.Stock

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Pledge Shares vs Pay Later (MTF)

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FAQs

Value of existing stock portfolio	Haircut	Funding received after haircut	Interest payable (@ 9.99% p.a.)
₹10,000	10%	₹9,000	₹899
₹1,00,000	15%	₹85,000	₹8,492
₹10,00,000	20%	₹8,00,000	₹79,920