The 50:50 cash collateral rule explained

Wed, 20 May 2026 00:00:00 +0000

The 50:50 cash collateral rule is an SEBI framework requirement that at least 50% of an F&O trader’s initial margin must be held in cash or cash-equivalent, with the remaining up to 50% available as pledged equity collateral. The rule prevents F&O traders from running positions entirely on pledged equity (which would create concentrated risk if the pledged equity’s value falls).

The rule

For every F&O initial margin requirement, the client must hold:

Cash Collateral on WebNotes

The 50:50 cash collateral rule explained

The rule